Construction & Real Estate
From The Report: Papua New Guinea 2015
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Although Papua New Guinea’s construction sector contracted in 2014 after a four-year boom from the massive PNG liquefied natural gas project, industry growth is expected to pick up again in 2015. New petroleum revenues are set to support the government’s sizeable infrastructure investment programme, which is seeing major improvements to roads, ports and airports in preparation for the 2015 Pacific Games and the 2018 APEC summit. The business environment remains challenging for private contractors, particularly in terms of obtaining construction permits; however, a growing emphasis on public-private partnerships (PPPs) and rising foreign financing has improved the near-term outlook, and new efforts to supply affordable housing and expand home ownership will certainly underpin steady, long-term growth. Rising inflation, as recorded in the country’s consumer price index (CPI) housing category, saw property prices and rental rates spike between 2008 and 2013. This trend continued into 2014, suggesting that the property market is likely to remain on an upwards trajectory, reinforced by robust GDP growth and a growing urban population.

This chapter contains interviews with Marcelo Minc, Country Director, Asian Development Bank’s Papua New Guinea Resident Mission; and Andrew Potter, General Manager, Pacific Palms Property.

Articles from this Chapter

Overview

Government projects promote construction sector growth in PNG
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Although Papua New Guinea’s construction sector contracted in 2014 after a four-year boom from the massive PNG liquefied natural gas (LNG) project, industry growth is expected to pick up again in 2015. New petroleum revenues are set to support the government’s sizeable infrastructure investment programme, which will see major improvements to roads, ports and airports, part of the country’s preparations to host the 2015 Pacific Games and the 2018 APEC summit. The business environment remains…

Interview

Marcelo Minc, Country Director, Asian Development Bank’s (ADB) Papua New Guinea Resident Mission: Interview
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Interview: Marcelo Minc What role should development partners play in the context of the Papua New Guinea economy? MARCELO MINC: As part of the Country Partnership Strategy (CPS), ADB plans to invest as much as $1bn in the next five years in PNG, while the development partners’ contribution as a whole accounts for 10% of the national budget. These numbers give you an idea of the importance that partnerships hold for the country’s development. However, while the ADB concentrates on removing…

Analysis

PNG’s contractors are busy preparing for the 2015 Pacific Games
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The construction boom from the Papua New Guinea liquefied natural gas project may be slowing after years of fast growth, but the sector is still in the midst of expansion, led by infrastructure projects ahead of the 2015 Pacific Games. An opportunity to showcase the country’s rapid development and natural beauty, the games prompted major upgrades to stadia and transport networks, to the benefit of private contractors. Winning Bid The games, which took place July 4-18, 2015, attracted more than…

Overview

Affordable housing creates investment opportunities in PNG
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Much like the construction industry, Papua New Guinea’s real estate sector has recorded strong growth in recent years as the nation rolled out its $19bn PNG liquefied natural gas (LNG) project. Rising inflation, as recorded in the country’s consumer price index (CPI) housing category, saw property prices and rental rates spike between 2008 and 2013. This trend continued into 2014, suggesting that the property market is likely to remain on an upwards trajectory, reinforced by robust GDP growth…

Analysis

PNG real estate prices rise with rapid urbanisation
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The residential real estate sector has soared in recent years, as the government wrapped up construction on the $19bn PNG liquefied natural gas (LNG) project in Port Moresby. With rents and home prices showing a sharp increase, there is a growing concern that home ownership remains out of reach for the average citizen. If the strong GDP growth projections for 2015 are any indication, PNG will continue to grapple with elevated residential prices. While inflation is expected to ease in 2015, an ongoing…

Interview

Andrew Potter, General Manager, Pacific Palms Property: Interview
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Interview: Andrew Potter With real estate prices in Papua New Guinea gradually coming down, is the country likely to see an end to its property boom? ANDREW POTTER: Historically the residential market in PNG has seen high demand and short supply. This has led to a construction frenzy over the last few years, even though at the moment the market is in consolidation mode. The premium segment is in fact coming down significantly – by as much as 25-30% – but prices at the lower and middle end stayed…

Analysis

PNG gets to work building affordable housing
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First-time and low-income homebuyers in Papua New Guinea face significant obstacles to property market entrance. A five-year construction boom due to the recently completed PNG liquefied natural gas (LNG) project placed upward pressure on inflation, rents and property prices, while the nation remains one of the poorest in the Pacific, putting homeownership out of reach for the majority of citizens. However, with robust GDP growth forecast for 2015 on the back of new energy revenues, the government…