The exodus of expats from Papua New Guinea due to COVID-19 has had a dramatic effect on the country’s real estate sector. Robert Upe reports.

Real estate developments such as Edai Town outside Port Moresby, are aimed at PNG’s aspirational middle class. Credit: Godfreeman Kaptigau

Vacancy rates in Papua New Guinea’s capital Port Moresby have skyrocketed, especially at the higher end of the market, and rents have fallen by up to 50 per cent.

According to Brian Hull, Executive Chairman of Century 21 Siule Real Estate in Port Moresby, vacancy rates currently range between 30 and 90 per cent.

‘There are vacancies everywhere [residential and commercial] and the prices are being driven down,’ he tells Business Advantage PNG.

‘The exodus of foreigners occurred due to fear of COVID-19 and their non-return can be attributed to ongoing concerns about the pandemic, as well as the Government’s “take back PNG” stance.’

‘We manage 130 units for one landlord whose rents from two years ago have come down from K3500 to K2000 per week,’ says Hull, whose business has offered realty and property management services in PNG since 1973. ‘Lesser units that were fetching K1500 are down to K900 or K800.

‘The smart landlords are following the prices down. They’ve probably got a 30 per cent vacancy rate. We’ve got others [landlords] who won’t follow the prices down and they have a 90 per cent vacancy rate. Previously, there were waiting lists.’

Return?

Century 21’s Brian Hull.

Hull isn’t confident expats will return in any great numbers any time soon.

‘The exodus of foreigners occurred due to fear of COVID-19 and their non-return can be attributed to ongoing concerns about the pandemic, as well as the Government’s “take back PNG” stance,’ he says.

In Hull’s opinion, there appears no great interest from PNG’s government in getting expats back into PNG.

Home ownership boom

However, a positive side effect of there being less expat workers is that home ownership is growing among Papua New Guineans, especially those who have been promoted into positions previously filled by expats.

The biggest take up is being seen in the affordable housing sector at places such as 8 Mile and Edai Town, where less than K500,000 buys a townhouse or a duplex.

‘You can get a very pleasant house on land for that amount of money,’ notes Hull.

He says Bank South Pacific’s 40-year First Home Ownership Scheme Loan, with four per cent interest and 10 per cent deposit is popular.

‘It’s just wonderful if you qualify for it,’ he says.

However, potential buyers may have to show some patience. There is currently a backlog of approvals for land deals by the Lands and Physical Planning Minister, John Rosso, who tested positive for COVID-19 earlier in the year.