This was revealed in findings of a report released this week by the Papua New Guinea National Research Institute (PNG NRI).
The report is titled: “Potential Gains from the Development of a Viable Residential Property Market in PNG” (NRI Spotlight article Volume 9, Issue 6).
This Spotlight contributes to the debate on property development and a sustainable housing policy in PNG.
It focuses on one of the findings of the recent article by Associate Professor Eugene Ezebilo (2016) concerning residential property prices in Port Moresby.
It summarises the necessary conditions for a viable and competitive property market.
Due to factors including reduced import duties on building materials, lack of basic infrastructure and limited sourcing of local building materials, residential rental charges are high for average income earners.
Professor Eugene Ezebilo said his findings revealed that on average, houses are being rented for K2,000 per month in Moresby which is more than the salary of low income earners.
Location is one of the main drivers of property prices.
He explained that for 915 properties advertised in one of the daily papers in 2015, a weekly rental of a stand-alone three bedroom house in Town cost K4,250 and K725 at Nine-Mile.
An apartment in Town costs K3,629 weekly rent and K633 at Nine-Mile.
Ezebilo said: “The property market and informal housing sector is not well organised.”
“The Government must look at ways to make housing more affordable and to allow more people to invest in housing.”
The report provides policy makers with greater understanding of the need for a competitive residential property market, and its potential contributions to the Papua New Guinean economy.