Hausples.com.pg, Papua New Guinea’s leading real estate portal, is excited to share the results of the 2017 Real Estate Consumer Sentiment Survey. The survey sheds light on crucial information vital for property industry professionals such as Government authorities, developers, investors, insurers, financial institutions, personal home hunters, and real estate agents.
The survey was distributed over various digital and physical channels to over 2,000 respondents in both Papua New Guinea and globally; this is likely the most comprehensive real estate survey in PNG history. Most respondents were citizens of Papua New Guinea, coming in at roughly 91% of the total, whilst international respondents came from a diverse range of countries including Australia, America, China, Philippines, and Malaysia.
Survey respondents were reasonably evenly split between males and females and ~70% of respondents were over the age of 30. The most prevalent professions of respondents were government (19%), banking and finance (13%), oil and mining (13%) and real estate and construction (6%). Most respondents lived with a partner (husband or wife). Hausples.com.pg believes the demographics of the survey represent a highly accurate snapshot of Papua New Guinea society and the sample size of over 2,000 people provides statistical accuracy of over 97%.
Survey questions were divided between the rental and sales markets, financial literacy and the real estate industry generally.
In terms of the rental market, ~45% of respondents are considering renting a property over the next 2 months, confirming that demand for rental housing is incredibly high. Perhaps surprisingly, nearly 40% of those seeking rental accommodation have a preference for condos/apartments, with the next most popular property type being PNG-style houses (timber framed, high set buildings). Roughly 45% of respondents are prepared to spend over k2,000 per month renting and 40% consider that renting is either somewhat affordable through to very affordable. This should give apartment developers in the capitals continued confidence of ongoing demand throughout the price spectrum, but particularly for affordable styles of housing.
Property purchase is now an extremely high priority for Papua New Guineans, with over half of respondents (55%) stating an intention to purchase over the next 12 months. Sentiment toward housing is also extremely buoyant with 61% of people believing that now is a good time to buy a home. This is despite (or perhaps even the result of) a highly prevalent belief that property prices have increased over the last 12 months (67% of people). As distinct from renters, purchasers clearly prefer PNG and Western style houses (30%+ and 28% respectively), with condos being preferred by just 7% of respondents. Port Moresby is by far the most popular locale for property hunters, with 80%+ respondents seeking to buy in or around the Capital, followed by Lae, East New Britain and Madang.
Purchasing power and financial literacy are also rapidly improving, indicating that steps taken by both the Government and private enterprise, such as the First Home Ownership Loan Scheme, are having a positive effect. Whilst 70% of home hunters intend to spend less than K500,000 on their next home, a substantial proportion (20%+) will spend between K500,000 – K1 million, and 10% will spend K1 million or more. 85% of people are prepared to contribute a deposit of 10% or more toward their purchase and 77% indicated that they will fully insure their future home.
These results confirm very positive sentiment toward home ownership, the prospects for the real estate market and rapidly increasing financial literacy. Those in the real estate, construction and financial services sectors should be encouraged by these results. However, whilst there is clearly substantial demand for housing, supply clearly remains highly constrained. This is evidenced in respondent’s primary concern for the real estate industry as “land tenure and the availability freehold land” (over 60% of respondents). Indicating that Papua New Guineans are well aware of the complexities of the country’s customary land tenure system and the pressure this places on the availability of land for purchase.
Hausples.com.pg notes the Government’s efforts to increase the availability of land for purchase, particularly in the affordable spectrum. There are between 5,000 – 6,000 new homes forecasted to be built in Port Moresby over the next 18 months, with up to 50,000 additional homes slated to be build by 2020. These comprise major government initiatives such as the National Housing Commission’s mega-development at Duran Farm which will comprise 44,000 dwellings (standalone 2-3 bedroom houses). There are also some other smaller private developments such as Mediterranean Apartments (48 units comprising bedsit and 2 – 3 bedroom homes), Community Housing Limited’s proposed development at 9 Mile (160 stand alone 3 bedroom houses), and larger developments such as Edai Town which comprises 300 homes (2 – 3 bedroom homes).
This increased supply, when coupled with novel housing initiatives such as the First Home Ownership Loan Scheme and the National Superannuation Fund’s Housing Advance Scheme are excellent positive steps in allowing ordinary Papua New Guineans to purchase a home.
It is extremely encouraging to see the present efforts to address the housing shortage. These efforts are clearly increasing people’s positivity toward homeownership, education with respect to financial literacy, and general sentiment toward PNG’s property market. All of these factors bode well for the future of PNG’s real estate market and people’s prospects for living in a home.
Hausples.com.pg hopes that Government authorities, those in the real estate and construction sphere and the financial services sector will use the data contained 2017 Real Estate Sentiment Survey constructively and to the advancement of the Papua New Guinea’s real estate market.