Home building in Papua New Guinea is set to accelerate sharply, according to Matthew Care, Chief Executive and founder of the real estate website Hausples.com.pg, which has an expo in Port Moresby this weekend. He tells Business Advantage PNG that the growth is being driven by pent-up demand.
‘We believe over the next three or four years there will be in the region of 20,000 to 40,000 properties made available,’ says Care.
‘That is substantial. The market is moving to meet the demand.’
Care says the Hausples expo, which will take place on November 3–4, is intended to bring companies involved in the sector all under one roof.
‘We have got new developments, real estate agents; we have banks, insurance, we have got homewares, we have got security companies.’
Care says the lack of freehold land in PNG is an obstacle to growth. ‘Reports say that over 90 per cent of the land in PNG is customary title. But we are seeing more and more large developments come to market.
‘Developments that are huge by any standards: 10,000 to 20,000 homes. Sometimes the land is made available by agreement with the customary title holder.
‘People want to live in houses and more and more of these are going to come through.’
Care says leases of 99 years are also commonly used. ‘There are some huge developments going forward. I think, in the majority of cases, it will be leasehold but in effect it is the same thing.
‘There are rights for the leaseholds to be renewed as well. It is not like you get a 99-year lease and that is it.
‘Ordinarily, they are renewable for a nominal amount for another 99 years. So, basically, it is in effect an in-perpetuity right to the land.
‘So whilst it is not technically freehold, it is for all intents and purposes an absolute right to the land.
‘People want to live in houses and more and more of these are going to come through. That is what we are seeing.’
Care says most of the commercial activity involves deals directly with landholders.
He says that this proves viable provided landholders’ interests are well recognised: ‘If they are not productively using that land and they can be compensated for it to be used as development.’
‘There are options to allow Papua New Guineans to access their superannuation to allow them to have a deposit.’
Some of the large projects are undertaken by the government to provide housing for employees and civil servants.
Care says the combination of intense demand and interest from private and public enterprise will result in the sector growing.
He says there are also initiatives designed to increase home ownership. ‘You have got the first home ownership home loan scheme which is basically a discounted loan, a reduced rate loan, you can get through BSP.
‘There are also options to allow Papua New Guineans to access their superannuation to allow them to have a deposit.’
Care says many of these initiatives, both on the lending and deposit side, are often not well-known or understood.
‘So what we are doing … is not just about commerce, bringing people under one roof. We are also running a series of seminars from lawyers, accountants and economists about the market.
‘[We’re showing] what the options are in terms of getting into the market. It is both educational and an opportunity to meet people and businesses in the real estate sector.’