Housing worries being dealt with

 MANY Papua New Guineans dream of owning homes in major urban centres like Port Moresby and Lae but few can afford the costs associated with home ownership. A house is usually the most expensive single purchase an individual or family makes. Given the high cost, most individuals do not have enough savings on hand to pay the entire amount outright. 

In many countries such as PNG, mortgaged loans are available from banks and other financial institutions. If the home owner fails to meet the agreed repayment schedule, the bank or financial institution may repossess the property.

Home ownership gives occupants the right to modify the building and land, protects them from eviction, and creates a right to occupation which can be inherited. Houses and the land they sit on are expensive, and the combination of mortgage, insurance and maintenance are sometimes greater than monthly rental costs. 

Buildings may gain and lose substantial value due to real estate market fluctuations, and selling a property can take a long time, depending on market conditions. This can make home ownership more constraining if the owner intends to move at a future date.

Traditionally, home-own­ership was encouraged by Western governments be­cause it was thought to help people acquire wealth, encourage savings and promote civic engagement.

The PNG Government, as the employer with the largest workforce in the country, has been promoting home-ownership through its various schemes as well as providing rental accommodation for civil servants since independence.

The entity tasked with this role and responsibility has been the National Housing Corporation (formerly National Housing Commission), which is neither a state-owned enterprise nor a fully-fledged government department.

This rather strange status has in effect starved the corporation of adequate funding to fully implement the Government’s home-ownership schemes. As well, the chronic lack of funding has resulted in the failure by the NHC to fully maintain and upgrade its existing housing and accommodation properties throughout PNG. To add salt to injury, the corporation has been dogged by operational and financial mismanagement issues for much of its existence.

It was a major breakthrough for the NHC when the O’Neill Government assumed office after the 2012 general election and initiated plans to revive the ailing corporation.

Last year, the Government approved NHC’s public investment programme funding of K150 million, which includes a major housing project in Port Mores­by and smaller projects in Madang, Kavieng and Kimbe. As part of the pro­gramme, the corporation has embarked on a 24-month operation to carry out major renovation and upgrading of its rundown accommodation properties in the nation’s capital.

The Government’s focus on housing has resulted in two new initiatives – its partnership with Bank South Pacific in a home loan scheme and the proposal to set up the National Housing Authority to replace the NHC.

Prime Minister Peter O’Neill has advised Housing Minister Paul Isikiel to set up the authority because the NHC’s performance “left a lot to be desired”.

“For this Government to effectively deliver on this priority, I am now led to believe that NHC needs to be transformed into an authority, which will provide a legal and organisational structure on commercially-based principles, to manage and regulate housing programmes and real estate development in the country,” O’Neill said

This is a major relief for the NHC, whose acting managing director John Dege has been instrumental in pushing for the establishment of the National Housing Authority. Dege firmly supports O’Neill’s view that the Gov­ernment’s housing initiatives and multi-million kina projects can only be effectively delivered through this new organisational structure.

For too long, successive governments have been flogging the same horse, trying to get it to perform better without any success.

Finally, O’Neill has stepped in to bring much-needed changes to government housing policies and projects just as he has done with education, health and other key development programmes.