Construction & Real Estate
From The Report: Papua New Guinea 2018
View in Online Reader

While resources-related projects will always be the engine of the sector, the rising number of residential, hotel, retail, transportation and office developments are becoming increasingly important, as the country’s hosting of APEC in 2018 and the expanding middle class continue to shift Papua New Guinea’s construction priorities. Although a downturn in the commodity cycle, the end of construction on the PNG LNG project and long-standing ambiguities over land rights have constrained development in the real estate sector, changes are afoot that could lead to significant improvements. About half a dozen major housing projects are now under way, and homes at reasonable prices are fast becoming available. A culture of home ownership is taking hold, driven by rising prosperity and aspiration.

This chapter contains interviews with Matthew Lewis, Managing Director, Hornibrook NGI; and Graham Boddington, General Manager, Northbuild Construction.

Articles from this Chapter

Overview

Playing host: Major developments undertaken ahead of the 2018 APEC Leaders’ Summit taking place in Port Moresby
OBG
plus

While resources-related projects will always be the engine of the sector, the rising number of residential, hotel, retail, transportation and office developments are becoming increasingly important, as the country’s hosting of APEC events in 2018 and the expanding middle class continue to shift Papua New Guinea’s construction priorities. The skyline of Port Moresby is rising, while large housing developments, malls and shops are being built in the suburbs and countryside, connected by modern…

Interview

Unlocked potential: Matthew Lewis, Managing Director, Hornibrook NGI, on recovering commodity prices and the need for lower tariffs
OBG
plus

Interview: Matthew Lewis, Managing Director, Hornibrook NGI How would you characterise the outlook for Papua New Guinea’s construction sector in 2018? MATTHEW LEWIS: The year of 2017 was somewhat below average; the main challenge came from the shortage of foreign currency, which limited many companies from importing their materials from abroad. Events like the South Pacific Games drove growth for considerable periods in the past, however, the foreign currency problems prevented that in 2017 and…

Analysis

Foreign interests: Infrastructure is increasingly being developed by Chinese firms
OBG
plus

China’s Belt and Road Initiative (BRI) is becoming one of the main drivers of construction activity in Papua New Guinea. Local media reported that China has overtaken Australia as the largest donor to the South Pacific region, pledging $4bn in 2017; however, the nation’s growing presence in the region has also raised some concerns. Mixed Benefits Although a number of large-scale infrastructure projects have commenced as a result of the BRI, the majority of these have been awarded to Chinese…

Interview

Heightened demand: Graham Boddington, General Manager, Northbuild Construction, on addressing demand for housing and basic infrastructure
OBG
plus

Interview:Graham Boddington, General Manager, Northbuild Construction How attractive is Papua New Guinea’s construction sector to both local and international companies? GRAHAM BODDINGTON: In general, the business environment for construction-related projects cannot be described as attractive at this time. Over the last 12-18 months companies have had difficulty finding international joint-venture partners. PNG is considered too risky, while the Australasia market remains profitable. Regardless,…

Analysis

Material change: Demand for locally produced building supplies continues to rise
OBG
plus

In the absence of a well-developed local manufacturing base for building materials, Papua New Guinea’s construction sector has largely depended on imported materials over the years, which has translated into high costs and slow development. However, recent government policy changes geared towards reducing imports of capital goods and encouraging self-sufficiency could be a boon for domestic producers, which should help to lower operating costs for the sector over time. Despite the overall lack…

Overview

A market in the making: Land reform under discussion to expand access to property
OBG
plus

Although a downturn in the commodity cycle, the end of construction on the Papua New Guinea liquefied natural gas (LNG) project and long-standing ambiguities over land rights have constrained development in the real estate sector, changes are afoot that could lead to significant improvements. About half a dozen major housing projects are now under way, and homes at reasonable prices are fast becoming available. A culture of home ownership is taking hold, driven by rising prosperity and aspiration. Longer…

Analysis

Boomtown hopes: Resource projects and large-scale events create demand
OBG
plus

The property market in recent years has been heavily influenced by extractive projects and, more recently, Papua New Guinea’s hosting duties as chair of the APEC forum in 2018. These have created a serious gap in supply and demand, which has affected prices. PNG LNG Impact The project that had the biggest impact on the market was the $19bn ExxonMobil PNG LNG project, specifically the construction phase. Due to the influx of foreign staff and the migration of workers from other parts of the country,…