Good property market vital

A well-developed competitive property market is lacking in Papua New Guinea, the National Research Institute (NRI) says.
“Potential gains from the development of a viable residential property market in PNG” highlighted that the country can obtain considerable revenue from transactions involving residential properties,” NRI said in its latest report.
The paper focused on one of the findings from recently article by Ezebilo et al (2016) concerning residential property prices in Port Moresby.
The article stated that K22 million could have accrued to the state, as revenue from stamp duties.
The study was part of the research project by NRI that focused primarily on tracking of property prices in Port Moresby, which is the largest market in the country.
According to the report, a competitive property market would spur economic growth, and benefit all sectors of the economy, promote a viable competitive residential property market, import duties on building materials must be reduced, basic infrastructure provided, and building materials sourced locally and also necessary is to support the activities of the newly established Customary Land Development Office, and allocate land using market-based systems. Some of the findings from the report indicated that:
It was assumed that residential property market in PNG is a seller’s market. This was driven by high demand in a low supply environment. Given high demand for housing in Port Moresby, any advertised price most likely would be the sales price.
The findings reported implied that PNG’s property market is not well-developed, which lead to loss, and/or delayed realisation of potential revenue that could have accrued to state.
In order to stimulate emergence of a competitive residential property market in Papua New Guinea, there is a need for the state to introduce a range of policies which included reducing import duties on building materials, provide basic infrastructure, where it is lacking, and regular maintenance of existing infrastructure, supply more customarily-owned land for the residential property sector, encourage effective planning in informal dominated areas and source building material locally to reduce cost of building houses.
The article was written by associate professor Eugene Ezebilo, project officer Lucy Hamago and NRI director Dr Charles Yala.