Population explosion in major towns and cities in the country has resulted in shortage of accommodation, according to a real estate development agent.
Jinyn Development Ltd’s Sales and Marketing consultant Charles Maino said in an interview that the increase in population in Port Moresby had created a situation where up to 10 people were forced to reside in a three to four bedroom house while others were still struggling to secure their own accommodation.
Maino said that the trend was an ongoing issue that resulted in housing supply problems in the city. He said the situation was adding more pressure on property developers to develop more units to cater for the market.
“We are currently experiencing a housing supply problem. Due to major developments, most people are flooding into the city and the supply of residential properties is limited and cannot adequately cater for the increasing number of people”.
He then added that “developing more residential apartments and units at affordable prices will help address the housing issues not only in Port Moresby but also in other major towns and cities”.
Increase in Home Prices matching the increase in demand
In responding to high housing prices and rental fees, Maino commented that there was no regulatory body to regulate how much property owners should set their rental prices and fees.
He said there was no proper planning in the beginning to regulate the real estate industry in the country and that was why property owners were increasing higher rentals for their properties. Having said that we cannot blame home owner for setting prices that high as they simply match with the supply & demand rule being currently very severe in PNG real estate market.
“This is a general perception but if the government is serious about the real estate industry and especially in addressing housing woes in our towns and cities, it should establish a real estate regulatory body to regulate how much rental fees and housing prices should be imposed on the clients,” he said.
More Government Support Needed?
The similar sentiments were expressed by the newly-appointed National Research Institute (NRI) Director Dr Charles Yala and the manager of Our Real Estate Ltd Stanley Naime.
According to Naime, real estate industry is a big avenue in the country but it had not been given any support or recognition by the Government to lower accommodation rates that had contributed a lot to the housing issues.
“The demand for residential and commercial properties in the country remains high despite the Government initiatives to address housing issues in the country” Naime said.
He said the government should give more support to the real estate developers who were really determined to address housing issues in the country.
He also added that there were complaints from people that prices and rental fees for real estate properties in cities like Port Moresby, Lae, Mt Hagen, Goroka and Rabaul were sky-rocketing.
“Prices and rental fees for real estate properties are determined by the market forces and it will continue to remain high as long as the demand is there”.
“If the Government really cares for the people in addressing housing issues, it has to subsidise certain percentage of the high residential property fees so property owners can reduce housing prices and rental fees.”
“This would help reduce housing woes in the country,” Naime said.
Dr Yala added that the Government’s housing initiative was a welcome news for the people of this country, but many would not benefit as they had no state leases to offer as security for loans at commercial banks.
“Some citizens may have state leases or land titles but that land titles may not be bankable because of the duplicate titles produced by the Lands Department,” he said.
Meanwhile, commenting on recent reports regarding the reduction in rentals due to close of PNG LNG construction phase, Maino said the PNG LNG was only one part of the economy and the close of the LNG construction phase did not really affect the real estate industry in the country, as more people were coming into the country for other business opportunities.
“Apart from the PNG LNG, there are other major developments and business opportunities that are attracting more people to the city to grab business opportunities new developments are creating,” he said.
“Developing more residential properties for high end market will decrease the burden on middle and low end market.”
Though many analysts and commentators expect real estate market in the country to continue to remain flat this year, home ownership rates are forecast to rise when a number of affordable housing developments are rolled out.
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