Housing crisis in city

Business, Normal

The National, Thursday 06th of March, 2014

THE government’s intervention in the city’s housing projects will result in oversupply of affordable accommodation for average income earners, a local real estate company said.
Kenmok PNG Ltd managing director Joe Kenken Mok was reacting to the National Housing Corporation’s recent announcement to build 40,000 homes in Port Moresby to address the growing housing crisis.
Mok said he was seeing a growing market for low-to-medium class market with prices ranging from K200 to K2,500 per week in the city.
On the other hand, he pointed out the market was “softening” for high-class accommodation with a price tag of K2,500 and above per week.
Mok said: “Demand for housing is big, especially in the low-to-medium class houses.
“For the upscale level, accommodation demand was high during the peak period of the LNG project construction and the owners cashed in on their properties.
“In the past two to three years, we (Kenmok) also gained a lot by tripling our rentals.
But the demand was short-lived, Mok said.
“The trickle down impact also affected the middle-class housing during the high activity period.
Mok said the huge demand right now is for low range housing.
“Public servants live in low-class accommodation in certain areas in the city with no water or electricity as their housing allowance is not enough to meet the rent.
“The private sector is bent on maximising profits while minimising costs,” Mok said.
“If the government embarks on similar housing projects like it did some 20-30 years in several areas in the city for low-to-middle income earners especially public servants, the market ‘can be correct’.
“Real estate companies will find their ‘real value’,” Mok said.
“What I mean is that if the government builds and puts a three-bedroom house up for K200 per fortnight, a real estate company would have to drop his price, which is currently at K3,000.
“Surplus of housing would mean less demand but more affordable to more people,” Mok added.