Pacific Island nations are emerging from the shadow of the COVID-19 pandemic with their real estate markets showing signs of gradual recovery. The pace is measured, uneven, and intricately tied to broader economic and social factors in 2025.
The pandemic sharply disrupted tourism-dependent economies across the Pacific. Countries like Fiji, Vanuatu, and Samoa felt immediate impacts as borders closed and visitor numbers plummeted. The resulting downturn weakened real estate demand, particularly in hospitality-linked and commercial properties.
By mid-2024, tourism rebounded steadily. Fiji, accounting for a significant share of regional economic output, reported visitor arrivals approaching 85% of pre-pandemic levels, according to the Fiji Tourism Board. This resurgence underpins demand for short-term rental properties, hotels, and related commercial real estate as reported by Fiji Tourism Board in 2024.
The commercial real estate sector mirrors these dynamics. Office occupancy rates in business hubs like Suva and Port Moresby are slowly improving after pandemic lows but have not yet returned to pre-2020 levels. Investors remain cautious amid uneven economic recovery and global uncertainties according to Raine & Horne Fiji.
The Asian Development Bank reported that the residential market is more resilient. Driven by urban population growth, multi-family and rental housing demand has held steady or grown in key cities. Rising construction costs and supply chain disruptions challenge new development but have also limited oversupply risks.
Fiscal stimulus and government support programs have helped cushion the sector. Infrastructure spending in the Pacific is on the rise, with projects focused on ports, roads, and utilities supporting long-term real estate value. Google’s investment in Fiji’s data center, for example, sends positive market signals.
However, economic headwinds remain. The World Bank’s Pacific Economic Update notes regional GDP growth slowing to 2.6% in 2025 from 5.5% in 2023. Inflationary pressures and global supply chain challenges persist, constraining consumer and investor confidence.
Financing costs also pose limitations. Local capital markets remain shallow, with many developers relying on limited bank credit. New financial instruments and donor-backed credit schemes are emerging but have not yet fully bridged the financing gap according to UNDP Pacific Report, 2025.
The recovery in real estate is layered. High-end resort developments and commercial properties linked to export sectors see cautious investment inflows. Affordable housing—especially multi-family properties—is increasingly sought after, driven by urbanization and migration patterns.
According to Lowy Institute, emerging trends reflect shifts toward sustainability. Green building designs and climate-resilient construction are no longer optional in island nations vulnerable to extreme weather. Developers and governments are integrating resilience to future-proof assets.
The real estate market will likely experience a divergent recovery pattern. Tourism-centric properties rebound early but face sensitivity to global travel fluctuations. Residential and infrastructure-linked real estate offer steady, fundamental growth opportunities.
Pacific Island nations face a delicate balancing act. Reinvigorating their real estate sectors involves managing climate risks, ensuring affordable housing, and catalyzing economic diversification beyond tourism.
Post-COVID recovery is underway but incomplete. Real estate markets show resilience amid uncertainty and reflect the broader challenges and opportunities shaping Pacific economies in 2025.
