What we’ve done is to study the top 150 properties from various listings to find out what percentage of properties available on the list represents each of the main suburbs in Port Moresby.

Source: Potix Properties

20150421_074954

Papua New Guinea’s real estate rental market is one of the most expensive in the world. Especially in its capital Port Moresby where rentals in prime suburbs have shot up by 100% to 200% over the last 5 years or so.

But things are slightly changing, at least in the prime suburbs anyway, if the results of our research is any indication.

Since the start of the new year, we have been tracking listings of the properties available for rental in Port Moresby as advertised by the real estate agents both in the print and online media.

What we’ve done is to study the top 150 properties from various listings to find out what percentage of properties available on the list represents each of the main suburbs in Port Moresby.

The results aren’t conclusive but at least it does give a general indication of how the relevant  suburbs are performing in the rental market in Port Moresby.  The results only reaffirm what many of us have in mind, particularly, the prime suburbs like Town, Boroko and Waigani.

So let’s see what the results are?

Suburb Residential Properties Available for rent
Town 23%
Boroko 17%
Waigani 12%
Gordons 10%
Gerehu 5%
Korobosea 8%
Tokarara 4%
Hohola 4%
6mile 3%
Badili 3%
GardenHills 2%
Koki 1%
7mile 1%
NCC 1%
Rainbow 1%
9Mile 1%

Town has the highest rate of properties available for rent at 23%.  This is an expected result given that most occupants working for the LNG project have left.  With rentals still in the high K4,000 to K5,000 per week range, it’s certainly not within the budget for the majority of working Papua New Guineans.  In short, premium properties in prime suburbs are on the decline.

Boroko, Waigani and Gordons could be given a similar explanation for expatriates who occupied these rental properties in these suburbs.

But as far as locals who rented properties in these suburbs, it’s fair to say that a good number of tenants have moved out to outer developing suburbs due to a slightly cheaper rent being afford.

Others who have moved out from suburbs like Boroko, Waigani and Gordons either have purchased their own home in developing suburbs like Nasfund Estate in 9 mile or thereabouts.  The improvement in quality of housing in these once undeveloped areas have to a certain extent been a driving factor to moving out.

What the results above are showing is that rentals in outer suburbs are performing strongly.  The quality of housing has improved drastically. Clear examples are those around 8 and 9 mile.

The Government’s continuous effort to improve road conditions as well as building new roads means that residents with vehicles previously residing in prime suburbs feel more comfortable to head out to outer suburbs and pay slightly lower but not exactly a cheap rental rate.

How the prime suburbs will perform over the next few years is difficult to determine at this stage but economic predictions are that there is more business activity to take place especially with APEC around the corner in 2018.  If the relevant Government takes the same approach as that of the Pacific Games, it will be business as usual.

Even developers in Town aren’t slowing down.  The Paga Hill Estate is just starting to pick up with a 100 or so residential apartments to be built.  Construction is expected to be completed just before APEC.  The same can be said of Star Mountain development at Waigani.

Adjacent to the harbour is Steamship’s Harbourside development which has just been completed and certainly adds a more modern commercial dimension to Port Moresby’s waterfront.

If any of these current developments are any indication, developers remain confident of positive returns.

Landlords in town with properties past their used by date will have a lot more difficulty competing with new apartments. It will be a case of lowering the rentals or a complete overhaul of the property if they are to secure tenants. If the latter, it’s a question of whether the cost of the overhaul will bring positive returns.

Interesting times ahead!

Comments

comments