Market demand for low-end residential housing in Port Moresby remains high despite efforts to make available more affordable houses to meet the increasing demand.
While the demand for high-end housing lessened after the completion of the PNG LNG construction phase last year (2014), the limited supply of medium and low end housing cannot adequately cater for the increasing demand from home buyers who are eyeing more affordable housing, thereby widening the housing supply and demand gap in the real estate market.
This trend has resulted in the prices to remain unchanged for the lower end houses in the city.
According to Khor Eng Hock & Sons (PNG) Ltd general manager Phil Ho, there are currently huge shortages in the affordable low and medium housing, especially affordable housing that is below K250 000.
“But there is an abundant supply of high end housing in Port Moresby. Demand for high end housing in good and secured locations is still high, especially the newer units and those close to main amenities,” Mr Ho said.
While this situation is ongoing, the challenge is now with the real estate developers to develop and make available more affordable housing to suit the market demand and customer tastes. It is expected that the general decline in the demand for high end housing may possibly force property owners to lower the selling prices and rental rates of some of their residential properties. Rental rates and prices for medium to low end houses will remain unchanged or will slightly increase following the market demand.
The signs are already showing. Some high end units in Down Town, Boroko, Gordon area and Waigani that were previously leasing for K350 000-K700 000, or renting at K4000-K6000 per week, are now leasing and renting at K250 000-K550 000 and K1000-K4000 per week, respectively.
It is expected that housing prices and rental rates will continue to drop as more and more people start to develop and manage their own houses through the Government’s housing initiatives.