Investment decision based on property shortage: Bank

Business

THE significant investment decision in construction in Port Moresby is based on the estimated shortage of real estate, due in part to expectations brought about from the resources boom in Papua New Guinea, according to the Kina Bank’s wealth management’s August monthly synopsis.
“In addition, increased liquidity, especially from local superannuation funds, freed up capital for real estate development,” the bank said.
“There have been significant investments into construction in Port Moresby over the last five years with key large-scale projects such as Hilton Hotel, Ela Matana Apartments, Apec Haus, Nambawan Plaza and Touaguba Hill Paradise Apartments.
“New developments like Rangeview Heights Ltd and Nobel Centre are both currently under construction and are expected to be completed in the medium-term.”
The bank said economic conditions and oversupply were currently having a negative impact on the outlook for commercial, residential and industrial developments in Port Moresby.
The bank noted that the development market was volatile and it seemed likely that the historically high rates of capital appreciation had moderated over the last few years as demand and supply conditions emerged.
Kina Bank maintains its view that both the residential and commercial market in Port Moresby would remain under pressure in the medium term due to increasing supply and low economic growth.

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