BOOMING property prices in recent times primarily due to the construction phase of the ExxonMobil-operated PNG LNG project has occurred in Port Moresby according to a recent property price movement report.
Published by the National Research Institute (NRI), the report used advertised prices gathered from The National newspaper to analyse the Port Moresby property market.
The analysis was done across location and time for both sales and rental of residential properties over a 12 month period from July 2012 to July 2013.
Where data was available, land sales and lease prices were also analysed, the NRI said in an announcement.
NRI director Thomas Webster said the institute initiated the Property Price Tracking project in 2012 to create a database that provides useful details on the dynamics that is driving the property markets in PNG, particularly Port Moresby.
Within the study period, the report said prices of property in Port Moresby were volatile, rental prices depicted a downward trend and standalone houses were bring transformed into units and apartments.
Traditionally low cost suburbs experienced rapid booms in both prices for sales and rental and land priced were also high during this period, according to the NRI report.
The construction phase of the PNG LNG project resulted in increased employment opportunities coupled with high internal migration levels contributing to population growth in the city, the report said.
An increased population leads to the centralisation of infrastructure and services development in Port Moresby and these factors create a trickle-down effect, causing rapid real estate development in Port Moresby, according to the NRI report.
Implementation of Strata Titling Laws in PNG was mentioned as a key policy lesson in the report.
PNG does not have a Strata Titling System, as a result, transactions on unit, duplexes and townhouses are facilitated through sub-lease arrangements, the NRI report said.
Improved planning, development and records management systems, sound government policies, improved access to land and access to a sales database were all noted as fundamental policy lessons the NRI study found.
The study found that there are existing government initiatives making inroads into each of these areas.
Investments into the core components of the National Land Development program has the potential to deliver on these, the NRI said.
The Property Price Tracking study undertaken by the NRI is a part of the work done with the Department of Treasury and the Independent Consumer and Competition Commission (ICCC), to implement the recommendations of a major report on the housing and real estate industry completed by the ICCC in 2010.