Lift in activity likely to boost real estate

A LIFT in activity is expected for PNG’s residential property market heading into next year, report says.
The Oxford Business Group report forecasts this will boost rentals and sales “after a recent cooling from a slowing economy and rising costs”.
It, however, warns that Government support for the real estate sector – directly through investments in housing and infrastructure developments or indirectly through state spending to boost economic growth – is likely to remain restricted in the short to medium term.
It said the World Bank had warned that weaker commodity prices and a slowing economy last year – GDP expanded by 2.4 per cent, down from 6.8 per cent in 2015 – caused the State to slash spending by K200 million in the 2017 budget. It prompted cuts to capital works programmes for this year.
The report quoted Strickland Real Estate general manager Ken Richardson, saying a slowing economy and lower overseas investment had “seen a draw-down of foreigners seeking housing, impacting the upper end of the rental market in Port Moresby though demand remains solid in certain segments of the market”.
“We understand there are now about 5000 fewer expats in Port Morseby than two years ago, meaning that demand for high-end housing has dropped significantly,” Richardson said.
“Mid-range housing, which ranges from K2000 to K3500 a week, is seeing the highest demand.”