How Papua New Guinea is working to bridge the housing gap


Boosting the supply of affordable housing is central to efforts aimed at improving the lives of citizens in Papua New Guinea. Housing availability has become an increasingly pressing issue in recent years, especially as real estate prices for both renters and buyers have been driven up by the limited availability of land for development and the high cost of construction. The government of Prime Minister James Marape has prioritised this issue, proposing legislation for strata land titles and introducing an electronic process for land title registration, as well as taking steps to mobilise customary land through a means that brings benefits to the landowners. These efforts have been accompanied by a commitment to improve the supply of basic utilities – most notably, electricity – to support both developers and local communities.

While it remains to be seen to what extent these commitments will ease the housing gap, several largescale affordable housing developments were either completed, restarted or announced by the private sector in the latter half of 2019 and early 2020. At the other end of the market, continued interest in mixeduse developments in downtown Port Moresby over the period reinforced the ongoing appeal of high-end real estate in PNG – an appetite that is set to be satisfied by several projects that are in the pipeline.

Project Boost

The property market enjoyed a boom in the years leading up to the completion of the country’s flagship liquefied natural gas (LNG) development, the $19bn ExxonMobil-led PNG LNG project, in 2014. The construction phase led to an influx of foreign staff and local workers, with a peak of 21,220 persons employed in 2012. This was accompanied by a spike in demand for real estate and a rapid rise in property prices, placing PNG rental rates during that period among the highest in the world.

In 2019 there was hope for renewed demand due to progress in plans to add three LNG trains to the existing two at the PNG LNG plant (see Energy chapter). However, talks about two key projects required for the expansion were ongoing as of June 2020. While the potential benefits to the wider economy would be less extensive than those from the initial phase of the project, since the infrastructure and properties have already been developed, the real estate industry stands to benefit from another wave of demand from workers.


The residential market has traditionally been shaped by different preferences. Buyer behaviour is usually family oriented: three-bedroom properties were reported as the most favourable size of home by 50.8% of respondents in a survey conducted by local property portal in 2020. Some 35.7% stated a preference for four bedrooms, while 9.9% preferred five bedrooms or more. Around 3.6% of respondents prefer one- or two-bedroom properties. When asked about the type of property for purchase, 42% of respondents prefer to buy high-set buildings – sloping-roof dwellings elevated on stilts. This was followed by land (24%), low-set houses (16%), investment properties (13%), apartments (4%) and commercial buildings (1%). After price, a property’s location is the second-most important factor to buyers, ahead of security and building quality. The most popular locations within the Port Moresby area are the suburbs of Waigani, Gerehu and Boroko, according to the survey.

While over half (54%) of renters also prefer houses, they are more open to apartments, which were preferred by 40% of respondents. The remainder were split evenly between land and commercial properties. Security was second to price in terms of priorities, followed by proximity to public transport and services, proximity to family, neighbours and noise.


Port Moresby accounts for approximately 85% of the real estate market and Lae for 10%. The remaining 5% is divided primarily between Mount Hagen, Madang and Kokopo. Rental costs in the capital are high: in 2019 a well-equipped, three-bedroom house in the business district was estimated to cost between PGK3000 ($884) and PGK5000 ($1470) per week, a price which is comparable to those for similar accommodation in Singapore.

The high cost of construction and installation of necessary infrastructure is the leading factor in PNG’s elevated property prices: virtually all material and equipment is imported, and new developments often require the installation of public utilities and, in some cases, new roads. Chief among these requirements is enabling a supply of power: the national electrification rate was 13% in 2018, although this is set to improve as a result of the PNG Electrification Partnership, which was announced in November of that year. With the support of the US, Australia, New Zealand and Japan, PNG authorities aim to raise the electrification rate to 70% by 2030 (see Energy chapter).

Improved planning could help facilitate the installation of these utilities before building works begin. To this end, the current administration has made moves to introduce legislation for strata titles, which enable a block of apartments to be divided among multiple owners. Three new strata title bills were originally slated to be presented to Parliament in March 2020, according to local media. However, the outbreak of the Covid-19 pandemic and the subsequent lockdown and halting of business procedures delayed proceedings, and as of July 2020 the legislation had not yet been passed. The proposed laws seek to streamline the process of registering and managing strata titles by putting forth two new bills and one draft amendment to the 1981 Land Registration Act. These could help accelerate new developments and lower the cost of construction, a saving that could be passed on to buyers and help provide more affordable housing.

Informal Settlements

High prices, compounded by urbanisation, have led to a rise in informal settlements, particularly around the capital. Additionally, many real estate agencies only cater for tenancy agreements with commercial businesses rather than individuals. This prevents many people from entering the market and increases the likelihood of these individuals moving to informal settlements. Unofficial estimates reported that as many as 1m residents lived in Port Moresby as of 2018, with up to 100 informal settlements around the city. The housing shortage is linked to an unavailability of land: around 60% of land in Port Moresby is state owned, with the remainder largely under customary ownership (see analysis).


Land could be mobilised for development if a greater number of formal land titles were distributed. It was estimated in mid-2018 that as many as 7716 residential units had been built on land without formalised titles under the name of the occupants. Not only does this potentially present a legal hurdle should ownership be contested or if the occupant wishes to place the property on the formal housing market, but developments on informal land cannot benefit from the installation of utilities – such as the supply of electricity and water – undertaken by the public sector.

There are two key challenges to the formalisation of land titles. First is the challenge of negotiating formal land agreements with customary landowners who traditionally pass land verbally to the next generation (see analysis). Those parties who do reach an agreement may face delays in unlocking the land for development by the slow process of granting land titles, which are finalised by the Department of Lands and Physical Planning (DLPP). Long-standing hurdles were exacerbated in the short term by a mid-2019 Cabinet reshuffle that led to the replacement of the minister of the DLPP. As a result, pending applications were restarted from the beginning. However, efforts to implement reforms, including those to guide the mobilisation of customary land while maintaining landowner interests, may offer hope of a more streamlined process.

Efforts to reform land registration are moving forwards. In October 2019 John Rosso, the minister of lands and physical planning, announced that the department was implementing electronic solutions to land title security. At that time, the DLPP began to electronically scan records to prevent against missing files, the first step in an automated system that will electronically process the registration of transfers, mortgages and other transactions. These measures not only increase confidence in the traceability and security of registration and transactions, but also have the potential to generate revenue for the state.

The electronic files are part of the National Land Development Programme, the second phase of which began in 2020. The programme aims to establish a customary land development agency, review legislation regarding customary land, strengthen the land court system, reform agencies dealing with customary land and ensure the bankability of customary land titles. These efforts could also attract foreign investment in an area that has traditionally seen underinvestment, as land rights in PNG are known to be rigid.

Additional land could be opened up by resolving ownership rights to the country’s abundance of so-called deceased estates: plots of land belonging to people who have either died or are missing. Charles Yala, principal director at Niugini Land and Properties, told local press in July 2018 that such estates could account for a further 19,600 properties that have unresolved titles. He also reported that some 680 properties at the time remained under the care of a trust, and more than 700 properties were unaccounted for. Formalising ownership rights could help to bring a vast number of properties to the market and potentially ease demand for more affordable housing options.

Affordable Housing

Narrowing the affordable housing gap is a priority for Prime Minister Marape, who has reiterated his commitment to improving living conditions for PNG’s people. To cater to the needs of the growing urban population, the government plans to increase the supply of affordable housing and lower the proportion of those living in informal settlements from 28% in 2010 to 15% by 2030.

Some sector players argue the segment that offers the greatest potential for growth is affordable housing, as it is in urgent social demand. This sentiment is echoed by the market: when participants were asked to select the most desirable change to the industry, 42.3% of respondents in the 2020 survey selected affordable housing developments, while price regulation was second at 37.3%.

While there is no agreed-upon definition of what constitutes affordable in the country, many local housing agencies use a sales price of PGK400,000 ($118,000) as a benchmark, according to Hausples. This figure is in line with the maximum loan amount available under the government’s First Home Ownership Scheme (FHOS), which seeks to help low-income earners buy their first house.


The launch of the FHOS in 2014 was designed to enable first-time, low-income buyers to access loans ranging from PGK200,000 ($59,000) to PGK400,000 ($118,000), with a 4% fixed-interest rate and a maximum loan tenor of 40 years, with no fees for early repayment. The scheme is intended to provide a more competitive deal than what commercial banks offer, which is generally interest rates of 8.5-9% and a maximum tenor of 30 years, often with additional fees.

Responsibility for implementing the FHOS on behalf of the state falls to financial institutions such as Bank South Pacific (BSP), which was initially allocated PGK200m ($59m) by the government for the task. As of November 2019 there had been 847 beneficiaries of the FHOS, leading to the construction of around 1000 new houses. This enabled BSP to double its loan portfolio under the scheme to PGK400m ($118m) without obtaining additional state financing.

Beneficiaries must provide a 10% down payment and submit supporting documentation, including proof of employment and income, as well as evidence that the home will be their personal residence. However, as 80% of PNG’s workforce is employed in the informal sector, these requirements are difficult to meet for some low- and middle-income earners.


Another development that released a supply of affordable housing to the market in 2019 was the Kennedy Estate in Port Moresby. The 158-house project originally commenced as a joint venture between Lihir-based Anitua Group and Australian firm Amode Rapid Construction Services in 2015, but the local company bought out the foreign player following delays related to the supply of construction materials and approvals. The estate’s first property was handed over to the owner in October 2019, with another 70 sets of keys released by the end of the year.

The Duran Farm development, launched in 2014, is expected to bring new affordable units to the market in the coming years. The project was initially intended to provide 44,000 new homes to help address the affordable housing shortage near Eight Mile in Port Moresby by 2020. The state had provided some financial support for the installation of utilities, before allegations were made that land titles had been obtained fraudulently. When fraudulent activity was confirmed in early 2020, the project contracts were terminated, according to local media. However, four companies were swiftly selected to resume the development and were awaiting endorsement from the National Executive Council as of May 2020. With a combination of high-, middle- and low-end housing, Duran Farm offers more options for those seeking an affordable property.

Mixed Use

The ongoing appeal of PNG’s high-end real estate market is underlined by the progress of several high-rise, mixed-use developments under construction in downtown Port Moresby, which continued to attract interest in the latter half of 2019 and beginning of 2020. The PGK250m ($27.7m), 23-storey Noble Centre, developed by the China Railway Construction Engineering Group, is the tallest building in PNG. The skyscraper includes a commercial area with over 1720 sq metres of office space and 472 sq metres of retail outlets, as well as apartments and seven levels of parking to accommodate 215 vehicles. Of the total 92 office units, around one-third had been sold by June 2019, prior to their completion, according to local media reports. This reinforced that there is continued appetite in the luxury end of the market.

The second phase of the Nambawan Super Plaza complex was completed in May 2019, undertaken by superannuation fund Nambawan Super in partnership with Lamana Development. The mixed-use complex features a commercial space with retail outlets, as well as the Crowne Plaza residences, which is comprised of 54 long-stay and short-stay serviced apartments, and the Penthouse Apartments, which consist of 14 luxury residences. The development continued to garner interest through the latter half of 2019 and into 2020.

Another mixed-use development is the Harbourside South project, for which construction began in July 2019. Undertaken by Pacific Palms Property, the real estate arm of local conglomerate Steamships Trading Company, the construction contract was awarded to China State Construction Engineering Corporation and was slated for completion in 2022. However, the timeline may be delayed as many Chinese engineers were unable to travel to local projects in the first half of 2020 due to Covid-19-related restrictions.


Early steps taken by the Marape administration demonstrate a readiness to improve access to land for development, enhance the provision of basic utilities, and provide increased security to landowners and developers alike. If fully realised, these measures are expected to help boost the supply of affordable housing, adding to the private sector developments that are already in the pipeline, while improving the quality of life for PNG’s citizens.

While affordable housing may offer the most growth potential, continued interest in Port Moresby’s mixeduse developments in the latter half of 2019 and early 2020 reinforced the importance of high-end developments. This appetite is set to be met with the completion of related projects that are in the pipeline, and should help to ensure that PNG can cater to investor interest across all segments of the real estate market. There is potential for both affordable and high-end developments to be buoyed by large-scale extractive deals that would increase demand for property and provide trickle-down benefits for the wider economy.

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The Report: Papua New Guinea 2020

Construction & Real Estate chapter from The Report: Papua New Guinea 2020

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