To attract more investors into the housing sector in Papua New Guinea, import duties on machinery and building materials for residential construction should be reviewed or removed.
This will also promote opportunities for a competitive residential property market.
PNG National Research Institute (PNGNRI) reports that currently, most materials that are used to build houses in PNG are imported from overseas.
The import duties placed on the materials tend to push up their prices and consequently, this increases the cost of building houses.
PNGNRI researcher for the property development research program, Professor Eugene Ezebilo, said there is a need to lower duties on building materials, equipment and machines.
Ezebilo said the private sector would invest more in housing but the cost of building materials are high.
Importing building materials adds to cost of production, therefore increasing the cost of building houses, he stressed.
“This comes back to the selling price of houses and that’s one of the reason why rent in Moresby and other parts of PNG are quite high.
“The government must intervene by providing economic incentive such as reducing import duties, then that will attract more people to invest in housing.
“If that is done, there will be more people building houses, selling houses and buying it and there’ll be more revenue for the government,” Professor Ezebilo said.
He added that when there are more houses being built, then the supply of houses in Moresby and other major cities in PNG will increase as currently the demand is higher than the supplier.
If the government makes the property market competitive, more people will be employed in the sector and everyone will benefit, including the society, government and private sector, stated the professor.