Published on and written by Cyril Jarnias
The development of tourism in Papua New Guinea is gradually transforming the country’s land and real estate dynamics. However, this shift is occurring within a very specific context: an emerging real estate market, an economy largely dominated by natural resources, and, most importantly, a customary land system covering about 97% of the territory. Understanding tourism’s impact on the real estate market in Papua New Guinea therefore requires examining three key dimensions: land structure, public tourism policies, and the concrete evolution of real estate demand in tourist and urban areas.
A Frontier Real Estate Market Under Major Land Constraints
The Papua New Guinean real estate market is often described as a “frontier market” in the Asia-Pacific. The national economy remains driven by mining, oil, and agriculture, with a GDP estimated at $27.9 billion US in 2024 and projected growth between 3% and 4.5% per year until 2028. But when looking at the land structure, one immediately understands why real estate development, including tourism-related development, is so complex.
97
This is the percentage of land in Papua New Guinea governed by custom and belonging to clans, tribes, or large families.
This duality creates a clear fault line. Major tourism or real estate projects, whether hotels, marinas, or residential complexes for expatriates, are concentrated on that 3% of titled land, mainly in urban areas like Port Moresby or Lae. Investors and banks favor these lands as the risk of dispute is considered lower, rights are better defined, and mortgages are easier to establish. Across the rest of the territory, any tourism initiative requires negotiation with customary landowners, often numerous and sometimes in conflict over land boundaries or inheritance.
Good to know:
The scarcity of secure land and the housing deficit, especially in the mid-range and affordable segments, pushes a significant portion of the urban population toward informal settlements. In this already tense context, tourism projects (hotels, lodges, port areas) exert additional pressure on land.
Tourism, an Emerging Pillar of Economic Diversification
For a long time, Papua New Guinea has bet more on extractive resources than on services. Tourism still represents only about 2% of GDP, with a broader contribution estimated at 1.4% of the total economy in 2020 (over 1.1 billion kina). But this share remains modest compared to the country’s potential.
132,725
Number of visitors welcomed in 2024, marking the recovery after the collapse of international arrivals during the pandemic.
This growth relies on unique assets: over 800 cultures and languages, exceptional biodiversity, the world’s third-largest rainforest, coral reefs, and many World War II historical sites. Key products range from trekking on the Kokoda Track to diving in Madang or Kimbe Bay, and cultural festivals in Goroka or Rabaul. Each niche—adventure, culture, diving, surfing, birdwatching—generates demand for accommodations, commerce, transport, and therefore, real estate.
Attention:
National strategic documents (Tourism Sector Development Plan 2022‑2026 and National Tourism Policy 2025‑2045) aim to make the country the Pacific’s leading destination for authentic experiences, with the private sector as the driver. For real estate, this ambition translates into: broadening demand in major urban centers, developing new secondary tourism hubs, and an increased need for infrastructure (roads, ports, airports, services) that will reshape land values.
When Tourism Drives Real Estate Demand: Key Areas and Emerging Markets
Tourism’s impact on real estate manifests with varying intensity across regions. Port Moresby remains the country’s main gateway for both business travelers and tourists, making it the nerve center of the real estate market. The capital concentrates strong rental demand, particularly for premium housing and accommodations suited to an international clientele: hotels, secure residences, furnished apartments.
Neighborhoods like Paga Hill, Touaguba, Korobosea, or Boroko have established themselves as high-value micro-markets, with properties exceeding two million kina and rents reaching up to tens of thousands of kina per month for well-located three-bedroom apartments. This movement initially relied on the cycles of major energy projects, particularly the LNG project which caused a surge in rents between 2008 and 2012. But tourism development, especially around MICE (meetings, incentives, conferences, exhibitions) and international events, now supports this demand.
Example:
The opening of a 212-room Hilton hotel and the construction of convention centers like APEC Haus or the Kutubu Convention Centre in Port Moresby illustrate the convergence between business tourism and real estate. These facilities have spillover effects by justifying new high-end residential projects nearby, the development of office spaces, and encouraging the development of waterfront or mixed-use areas.
The Port Moresby North Port Real Estate development project, a 280-hectare coastal area combining hotels, residences, and commerce, embodies this logic. Designed as the heart of an urban expansion plan, it explicitly targets a tourist and business clientele, with public investment in basic infrastructure. This type of project creates a new geography of coastal land value and reinforces the capital’s real estate appeal.
35,000
Alotau welcomed nearly 35,000 international visitors in 2018, mainly cruise ship passengers.
This influx gives a boost to the demand for shops, restaurants, craft workshops, and small accommodations. In a land market where prices remain 30% to 50% lower than in Port Moresby, investors identify Alotau as a more affordable entry point to develop lodges, guesthouses, or small shopping centers.
Similar dynamics are emerging in Madang, Wewak, or Rabaul (East New Britain), all cited as areas with high tourism potential. Diving, surfing, festivals, or village visits create demand for well-located land: waterfronts, airport vicinities, proximity to cruise ports. These locations are beginning to see moderate speculation, particularly on the few titled plots or portions of customary land in the process of legal securing.
Table 1 – Key Areas Where Tourism and Real Estate Meet
| Zone / City | Main Tourism Role | Observed or Expected Real Estate Effects |
|————-|——————-|——————————————|
| Port Moresby | Gateway, MICE, international events | Strong demand for high-end hotels and residences, waterfront projects |
| Alotau (Milne Bay) | Main cruise stopover, diving, islands | Need for accommodations, tourist commerce, rising value of urban and coastal land |
| Rabaul (East New Britain) | Cultural festivals, cruises, WWII heritage | Pressure on land near the port, opportunities for special tourism zones |
| Madang | Diving, coastal tourism | Potential for hotel development and waterfront residences |
| Wewak (East Sepik) | Emerging market, coastline, cultural heritage | Entry prices lower than the capital, appeal for risk-tolerant investors |
These trends remain embryonic at the national scale, but projections of 5% to 10% annual real estate appreciation in areas with tourism potential, provided infrastructure improvements, indicate a trajectory strengthening the link between tourism and the land market.
Cruises: A Discrete Locomotive for Coastal Real Estate
The cruise segment deserves particular attention. Globally, cruises are one of the fastest-growing segments of world tourism, and Papua New Guinea has captured a growing share through targeted strategies. The number of cruise ship calls has increased, with 136 calls recorded in 2015, then over 51,000 cruise passenger arrivals in 2019, a record level before the pandemic.
An economic report commissioned by the Australian development agency, Carnival Australia, and the SFI (World Bank group) estimated the total economic impact of cruises at 5.9 million Australian dollars for the five ports studied in 2015, with 5.7 million in direct impact. About 89% of this impact was concentrated in Alotau, Rabaul, Doini Island, Kitava, and Kiriwina. Even if these amounts remain modest on a macroeconomic scale (0.01% of GDP), they are decisive for local economies.
Tip:
In real estate, cruises act as a catalyst rather than a sole driver. Their impact lies in the concentration of flows over short periods, which alone does not justify building large hotels but encourages the development of interfaces between the port and the city. These developments include terminals, jetties, promenades, craft markets, restaurants, and information points, each requiring and enhancing land with strong centrality.
In Alotau, recommendations and investments have focused on port upgrades (e.g., fresh water supply meeting international standards, ATMs near the wharf). In Kitava, the study suggested extending the jetty, which requires work on the maritime domain and immediately adjacent shorelines, often customary. In Madang, the call to develop the port to accommodate larger ships also implies reshaping the urban surroundings and thus the surrounding land value.
Good to know:
The regular arrival of cruise ships changes the price hierarchy of land, particularly that which becomes strategic near ports. In a context of customary land, this can trigger lease negotiations, informal sales, or the creation of land groups (Incorporated Land Groups) to capture tourism rents.
Table 2 – Economic Impact of Cruises (Five Ports Studied, Reference Year 2015)
| Indicator | Estimated Value |
|———–|—————-|
| Number of calls (5 ports) | 60 ship calls |
| Total economic impact | 5.9 million AUD |
| Extrapolated national direct impact | ≈ 6.3 million AUD |
| Contribution to GDP (5 ports) | 1.1 million AUD (≈ 0.01% of GDP) |
| Jobs supported (full-time / part-time) | 203 positions |
| Share of revenue from operators | 54% (mainly port fees) |
| Share of revenue to the government | 50% of direct impact |
Simultaneously, the increase in the average ship size – 347 passengers in 2007, 705 in 2015 – and the arrival of large ships like the Pacific Dawn in Alotau or the Pacific Jewel in the Conflict Islands reflect shipowners’ confidence in these stops. In the medium term, this trend could justify heavier real estate investments: welcome complexes, waterfront hotels, integrated commercial areas. But these developments have so far been constrained by several factors: complex port rules, high fee costs compared to neighbors like the Solomon Islands, and lack of coordination between maritime, customs, and tourism authorities.
An Ambitious Tourism Policy Reshaping Investment Priorities
Tourism’s impact on real estate doesn’t only stem from visitor flows but also from public policy choices. With the Tourism Sector Development Plan 2022‑2026 and the National Tourism Policy 2025‑2045, Papua New Guinea has established a structured strategic framework. These documents articulate a long-term vision: making tourism a major contributor to the economy while preserving the environment and cultures and integrating local communities.
Good to know:
A vast airport extension and modernization program, supported by the Asian Development Bank and the Japanese agency JICA, is underway. It includes transforming Lae Nadzab into a second international airport and improving several regional airports. These developments increase the tourism potential of the concerned towns and generate increased demand for accommodations, commerce, and housing for staff.
A second focus lies in the envisioned creation of “Tourism Special Economic Zones,” starting with Rabaul. These special tourism zones, if they materialize concretely, could offer enhanced fiscal incentives, better land right security, and smoother coordination between customary landowners, the state, and private investors. For real estate, this means the possibility of developing hotel parks, marinas, or mixed residential-commercial areas under a more transparent regime, which could raise values and attract foreign capital.
Good to know:
Tourism policy structures development around main hubs (Port Moresby, Rabaul, Milne Bay, Madang, Morobe) connected to satellite destinations. Hubs concentrate heavy investments (large hotels, infrastructure), while the ‘spokes’ rely on community-based accommodation. This hierarchy creates two real estate dynamics: rising prices and formal projects in centers, and the progressive formalization of usage rights in villages.
Table 3 – Tourism Policy Levers Directly Influencing Real Estate
| Policy Lever | Potential Effect on the Real Estate Market |
|————–|——————————————–|
| Modernization of airports and ports | Increased demand for hotels and commerce around infrastructure |
| Special Tourism Zones (SEZ) | Better land security, increased attractiveness for integrated projects |
| Development of tourism hubs | Concentration of heavy real estate projects in a few pole cities |
| MICE strategy (congresses & events) | Construction of convention centers, business hotels, upscale residences |
| TPA–private sector partnerships | Co-development of accommodations, training centers, tourism facilities |
However, the cancellation of the major tourism development project funded by the World Bank ($20 million US planned for Milne Bay and East New Britain) reminds us that implementing these policies faces recurrent obstacles: limited technical capacity, difficult institutional coordination, and budget imbalances worsened by the pandemic. For real estate investors, this translates into a promising but discontinuous trajectory and the need to anticipate political and administrative uncertainties.
Customary Land, the Central Lock to Tourism and Real Estate Investment
The land issue remains at the heart of the blockages. In a country where land is inseparable from social, cultural, and spiritual identity, the very possibility of “marketing” land is controversial. Legal mechanisms allowing the transformation of a portion of customary land into a usable land asset for a real estate or tourism project exist – acquisition by agreement, expropriation, voluntary registration through Incorporated Land Groups – but their application faces several problems: weak governance, high costs, administrative slowness, and sometimes fraud (as shown by the Special Agricultural and Business Leases scandal, where over 90% were deemed illegal).
Attention:
The pressure from tourism development creates both income opportunities for local communities (through accommodation, site rentals, and access fees) and exacerbates conflicts over territorial boundaries, the legitimacy of customary leaders, and benefit sharing.
Without bankable titles, customary landowners wishing to develop tourism infrastructure on their land – ecolodges, small hotels, cultural centers – have very little access to formal credit. They depend on their own funds, partnerships with external operators, or informal agreements. This limits the scale and quality of projects, even though potential demand exists. The paradox is clear: a community-based tourism model would be well-suited for Papua New Guinea, but the land and financial tools enabling these communities to become full-fledged developers remain insufficiently operational.
The National Land Commission, via the National Land Development Program, focuses on creating customary titles collectively held by incorporated groups, from which leases can be granted. On paper, this approach would offer a compromise between respecting traditions and integration into the formal economy. But on the ground, perceived legal insecurity, risks of benefit capture by a few local elites, and opposition from organizations like the Melanesian Indigenous Land Defense Alliance slow its diffusion.
—National Land Commission
For international tourism investors, this context means it is often simpler—but more expensive—to position themselves on the few already titled lands or on long-term state leases, rather than venturing into complex arrangements on customary lands. The consequence for the real estate market is an over-concentration of value and projects in certain urban and coastal corridors, while vast areas with high tourism potential remain underdeveloped.
Tourism Real Estate, Worker Housing, and Social Segmentation
The rise of tourism has another indirect effect on the real estate market: it reinforces the segmentation between different housing categories. On one hand, accommodation needs for visitors—hotels, resorts, lodges, short-term rental apartments—drive demand for well-located, secure properties with modern services (electricity, water, internet, 24/7 security). On the other hand, the employment generated by these activities (hospitality, restaurants, transport, crafts, related activities) creates increased demand for housing for workers, often with modest incomes.
40
Over 40% of Port Moresby’s population lives in informal or unplanned settlements.
This situation creates a well-documented risk in other global tourist destinations: that of seeing prosperous hotel or leisure zones surrounded by pockets of urban poverty, with strong pressure on rents for simple housing near hotels or waterfronts. In Port Moresby, data already indicates a massive perception of housing market “inaccessibility,” with over half of residents considering housing “very expensive” and about 80% depending on a mortgage to buy a home when possible.
8 to 12
This is the high rental yield observed in the premium residential segment, encouraging investors to favor this type of product.
Tourism Infrastructure and Land Revaluation
Every investment in tourism infrastructure—roads to sites, jetty extensions, airport renovations, implementation of security systems—acts as a land value multiplier. Runway extensions, construction of new terminals in Lae, Kavieng, Gurney, or Wewak, or the Jacksons International project in Port Moresby, do not only translate into increased transport capacity. They reposition these towns on the investors’ map.
Example:
The Nadzab Airport modernization program in Lae, transforming it into a second international airport, illustrates how connectivity improvement can amplify tensions in the real estate market. This upgrade strengthens the city’s role as an economic and logistics hub, benefiting industrial freight and tourism. However, as Lae already suffers from a shortage of available land for commercial real estate (warehouses and offices often saturated), this improvement accentuates scarcity. It leads to upward pressure on commercial rents and tighter land use arbitrage between industrial, residential, and tourism purposes.
Similarly, investments in roads in East New Britain or port facilities in Rabaul and Milne Bay facilitate access to dive sites, festivals, or coastal villages. As these destinations become more accessible, local and foreign investors become interested in land near these axes, triggering sometimes rapid revaluation. Without a solid planning framework and effective urban regulations, this process can generate scattered urbanism, with isolated hotel developments poorly connected to neighboring villages and public services.
Toward a More Sustainable and Inclusive Tourism Real Estate?
Faced with these dynamics, several paths emerge to make the link between tourism and real estate a lever for sustainable development rather than a factor of tension.
Good to know:
Recognition of customary land rights and social capital (clan systems, solidarity) is an asset for tourism. It allows for developing, with community agreement, accommodations (guesthouses, bungalows) on their land. Models like cultural centers, such as Toimtop in East New Britain, frame and monetize cultural resources, thus avoiding their extraction by external operators.
Second, establishing clearer mechanisms for securing land specifically for tourism projects—registered customary leases, partnership contracts between incorporated land groups and investors, revenue-sharing systems—would improve access to financing for projects on customary land. If over 20% of the country’s land became accessible for secure development, economic models indicate a potential GDP increase of over 50% by 2030. In this scenario, part of this growth would necessarily come from a boom in tourism and related real estate.
Tip:
The development of tourism infrastructure (hotels, resorts, ports) must be systematically accompanied by local housing plans. These plans must foresee well-serviced neighborhoods for workers, with accessible, connected housing and services. To meet the growing demand for single-family homes, sustainable construction (eco-friendly materials, solar energy), and spaces adapted to remote work, it is appropriate to promote compact and mixed urbanization models, beneficial to both residents and visitors.
Conclusion: A Powerful Lever, But Still Hindered by the Land Question
Tourism’s impact on the real estate market in Papua New Guinea is already visible but remains far below its potential. In major cities like Port Moresby, tourism reinforces demand for hotels, secure residences, and offices, contributing to high rental yields and ambitious development projects. In emerging areas like Alotau, Rabaul, Madang, or Wewak, it initiates a land repositioning of waterfronts, port vicinities, and roads leading to natural sites.
Attention:
The customary land structure, lack of bankable titles, administrative weakness, and litigation risks hinder development. The future relies on pragmatic land reform, infrastructure investments, and strengthening community capacities.
If Papua New Guinea manages to consolidate mechanisms for securing customary rights compatible with investor requirements, manage urbanization induced by tourism growth, and integrate the housing needs of local populations, the tourism sector could become one of the main drivers transforming the national real estate market. Otherwise, the risk is to see a persistent two-speed geography: a few high-end enclaves geared toward visitors and expatriates, surrounded by a landscape of informal housing and under-exploited tourism potential.
Good to know:
Each new tourism project (airport, cruise terminal, ecolodge, large resort) is a test to assess the country’s capacity to articulate tourism, land, and real estate in favor of truly inclusive development.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
