A new report indicates that most Papua New Guineans still consider house prices to be out of reach, although some still believe this is an ideal time for buying.

Nambawan Plaza under construction in downtown Port Moresby.

Hausples.com.pg has released its 2019 Papua New Guinea Real Estate Survey. The survey found that about 60 per cent of respondents believe that property is ‘very unaffordable’ in PNG.

A further 27 per cent said property here is ‘moderately unaffordable’.

‘These numbers are nearly identical to where they stood last year,’ the report says.

‘Port Moresby has a reputation of a high cost of living, and this includes the real estate market.

‘Security and backup facilities, such as power and water, do increase values; however a shortage of land to build on is often cited as the leading factor.’

Saving up

Credit: Hausples

There is an appetite to purchase property, however, despite the perception that prices are high.

The survey found that almost 58 per cent believe now is an ideal time for buying, while about a quarter believe it is best to keep renting.

‘Most people, it seems, will be waiting a year, or more, before putting down money on a property.

‘Fifty-two per cent said they would wait 12 months or more, with more than half of that number saying they would be waiting for more than 18 months.

‘Because the market is still perceived as unaffordable, buyers are saving up and planning ahead before buying.’

The survey found that 44 per cent of buyers prefer high-set houses (built on elevated foundations).

The second-most preferred type of property was land, with nearly 19 per cent saying they wanted to buy a plot.

‘Over four-fifths of respondents said they would require a mortgage to finance their property purchase.’

Fifteen per cent of respondents said they preferred a low-set house or an investment property.

‘The amount of land purchases in PNG may suggest that people think it’s more economical to build themselves or invest in pre-fabricated homes, rather than buying an established home,’ the survey says.

Mortgages

Over four-fifths of respondents said they would require a mortgage to finance their property purchase.

The majority expected to pay 10 per cent of the total price up front, while 21 per cent expected to pay 20 per cent of the total price.

’71 per cent of respondents are renting their property.’

More than 12 per cent said they would pay a deposit of between 21 and 40 per cent.

Home loans vary widely in their terms, conditions and durations.

‘The interest rate was by far the most important factor.

‘Concern over bank fees was also a key factor for many.’

Renters

Preferred locations for renting in Port Moresby. Credit: Hausples

Hausples found that 71 per cent of respondents are renting their property.

‘While this is the majority, it is down from 74 per cent last year and 76 per cent in 2017.

‘Overall, price and security tied in importance.’

‘Ownership, on the other hand, rose hugely. Almost 16 per cent said they owned a property in full.

‘Nearly 13 per cent said they owned with a mortgage, which is up from 10 per cent last year.’

Fifty-eight per cent of respondents say they prefer to rent an apartment, which is a significant increase from 38 per cent in 2018 and 33 per cent in 2017.

Desire for house rentals dropped to 40 per cent, down from 58 per cent in the previous year.

‘This is an interesting reversal and a suggestion that Papua New Guineans are prepared to change living conditions in the short term.’

A desire for better security is one reason for the change.

‘Overall, price and security tied in importance, despite nearly half of all respondents putting price in the number one spot,’ the survey says.

‘Over 68 per cent of respondents said they put security in one of the top two spots.

‘Proximity to public services and transportation was the third-most important factor for renters.’