PROPERTY prices in Port Moresby have continued to plummet since the end of the construction phase of the PNG LNG project.
The Papua LNG (Total) project will enter its construction phase shortly with full production around 2021 but this is only expected to hold up prices temporarily.
The cycles relating to the PNG LNG and Papua LNG are like fads. They come and go.
The fundamental development that will change the property landscape is to open up roads in Port Moresby’s surrounding areas allowing a lot more development to flourish.
Among the promising sites are 9 Mile to Gerehu back road (up to 10,000 houses), Gerehu to Hanuabada (10,000), Pomgrammer to Taurama (2,000), 6 Mile to Bautama (20,000+) and 9 Mile to 17 Mile (10,000).
That’s a potential stock of 50,000 residential properties covering the period 2017-27.
This should take the heat out of demand for current dwellings in pricey suburbs and continue to put downward pressure on inner city precincts such as Boroko, Korobosea, Badili, Koki, Town, Konedobu, Hohola, Waigani, Gordons Tokarara, Rainbow and Gerehu.
Current property prices range from K400,000-K600,000 in the new developments at 7 Mile, Skyview and Edai Town.
This has forced the prices of three-bedroom properties in Rainbow, once selling for upward of K800,000, down to around K600,000.
Two bedroom apartments in Town once going for K1.2 million plus are now selling for K800,000 or less.
Major current property developments at Skyview, Koki-Badili, Two Mile Hill and Edai Town are driven by Asian developers, with the exception of Kennedy Estate at 7 Mile.
If these fairly miniscule developments are holding down property prices, imagine what will happen when areas surrounding the ring roads are developed all over Port Moresby.
There will be a major correction in property prices within the city precincts.
I believe the safe exit period for people wanting to sell properties in existing dwellings in the pricey inner city suburbs is between now and 2025. Beyond that, they will sell for way less than today.