Where to Invest in Papua New Guinea: Neighborhoods and Cities to Watch

Published on January 17, 2026 and written by Cyril Jarnias

Papua New Guinea is increasingly attracting real estate investors seeking high returns in a still underexplored market. Port Moresby concentrates the majority of transactions, Lae is establishing itself as a second industrial hub, and a series of emerging towns and neighborhoods are beginning to offer more affordable alternatives. But in a country where 97% of the land is owned by clans, where security varies greatly from one area to another, and where infrastructure is uneven, choosing the right neighborhood becomes a strategic challenge.

A Real Estate Market in Strong Growth but Highly Contrasted

Papua New Guinea is classified among the “frontier” real estate markets in Asia-Pacific. Its economy, driven by natural resources (mining, oil, LNG, agriculture), has a GDP of approximately US$27.9 billion and expected annual growth between 3.0% and 4.5% until 2028. The population is around 9.4 million, with only 13% urban dwellers, but urbanization is progressing rapidly.

In terms of performance, the available data shows:

Period	Average Annual Change in Residential Prices (Port Moresby)
2010 – 2015 (LNG boom)	+15% to +20%
2015 – 2019 (post-boom)	-2% to +3%
2020 – 2022 (Covid)	-5% to 0%
Since 2023	+5% to +8% (recovery phase)

In this context, rental yields often remain high for investors, especially in the commercial, industrial, and staff housing segments linked to resource projects:

Asset Segment	Estimated Gross Rental Yield
Premium Residential (Port Moresby)	8% – 12%
Mid-range Residential	10% – 15%
Commercial Offices	12% – 18%
Warehouses / Industrial	11% – 16%
Staff Housing Compounds	15% – 20%
Accommodation in Mining Project Areas	18% – 25% and above

The key, for an investor, is therefore not only “to come to Papua New Guinea”, but to carefully select the city, the neighborhood, and even the micro-sector based on their risk profile and investment horizon.

Port Moresby: Heart of the Market and City of Contrasts

Port Moresby concentrates approximately 85% of the national real estate market. It is the country’s political, economic, and administrative center, but also one of the most unequal cities in the region, with very secure neighborhoods adjacent to informal settlements and pockets of high crime.

The city is officially divided into about fifteen major sectors (Boroko, Waigani, Town, Gerehu, Hohola, Gordons, Korobosea, 6 Mile, 8 Mile, 9 Mile, etc.). In addition, there are pockets of informal subdivisions such as Morata, Taurama Valley, or certain parts of 4 Mile and 2 Mile. For an investor, the task is therefore to identify the sub-markets that combine relative security, sustained rental demand, and a clearer regulatory framework.

Paga Hill and Touaguba: The Very High-End Residential Market

Paga Hill and Touaguba constitute the crest of Port Moresby’s residential market. Located on a hill overlooking the sea, these neighborhoods are home to exceptional villas and residences inhabited by corporate executives, diplomats, and senior officials. Prices range around 4 to 8 million kina for premium properties, equivalent to approximately US$1.1 to 2.2 million.

These sectors benefit from:

– very high-quality housing supply (architect-designed houses, secure residences),

– relatively easy access to the business districts of Town and Waigani,

– a prestigious image that makes them “showcase” addresses for businesses and expatriates.

In the medium term, appreciation forecasts for Port Moresby’s premium segment are around 3% to 5% per year. Rental yields there are generally lower than in more “functional” areas (Waigani, Gerehu, staff compounds) but remain attractive relative to risks: around 8% to 12% for well-positioned properties.

However, financial accessibility is very limited. In a country where the price-to-income ratio exceeds 130.5, these neighborhoods remain largely out of reach for the local population, concentrating demand on a relatively small number of creditworthy tenants (executives, large companies, international lessors). This is therefore a niche market, sensitive to resource project cycles and the presence of major companies.

Waigani: Politico-Administrative Center and Office Hub

Waigani stands as the main office and business hub of Port Moresby. Parliament, several ministries, public agencies, and numerous company headquarters are located there. The real estate supply is dominated by office buildings and mixed-use complexes, but there are also recent residences and hotels.

Office rents well illustrate the premium positioning of this sector:

Property Type	Area	Indicative Rent (PGK/m²/year)
Standard Offices	Waigani	~ 1,200
New High-End Offices	Waigani	~ 1,400
Offices (comparison)	Gordons	~ 1,000
Offices (comparison)	Hohola	~ 1,200
Industrial Warehouse	6 Mile	~ 850
Small SME Offices	6 Mile	~ 650

Sale prices for office buildings in Waigani or Hohola generally range between 3 and 15 million kina, depending on size, condition, and occupancy. The establishment of large complexes like the Treasury Tower or the Fincorp Building has reinforced Waigani’s status as the country’s decision-making heart.

For an investor, Waigani offers several advantages:

– a relatively resilient demand from administrations, banks, and large companies,

– high rental yields on offices (12% to 18%),

– a lower vacancy risk than in the historic CBD, where some buildings emptied out after the LNG boom ended.

In return, security around the Parliamentary sector must be taken seriously, with several reports mentioning incidents and tensions, especially outside of office hours. Private security costs, already high in Port Moresby, are therefore an item to include from the outset in the business plan.

Harbour City and Town (CBD): Commercial Showcase Under Pressure

The Town neighborhood – the historic CBD of Port Moresby – and the more recent Harbour City area form the other major business and commercial hub of the capital. Harbour City, developed by private players like Steamships, has established itself as a high-end real estate complex with offices, shops, hotels, and residences, including units occupied by ExxonMobil.

The strengths of this sector:

– a seaside location, close to Jacksons International Airport via main roads,

– a high concentration of multinational headquarters, banks, professional firms,

– a modern supply meeting the expectations of large companies: security, technology, parking, sea views.

However, the NRI study on Port Moresby highlights that after the construction phase of the PNG LNG project, many upscale housing units and offices in the CBD became vacant or under-occupied. Rental demand partly shifted to more affordable or more functional areas, while companies rationalized their costs.

Result: some buildings in Town today suffer from a significant vacancy rate. Investment in this sector remains relevant, but more so for players able to negotiate prices firmly, reposition assets (modernization, subdividing floors, services) or secure long-term corporate leases.

Gordons: From Industrial Zone to Dynamic Business Hub

Historically, Gordons was primarily an industrial neighborhood with warehouses, workshops, and logistics companies. Today, it is undergoing a transformation into a major business and commercial center. Major brands and companies have set up their bases there, like Dulux Group, Remington, or Coca-Cola, and new commercial and office complexes are emerging, such as the New Central Business Centre.

For investors:

– Gordons offers a compromise between high yields (in industrial and tertiary sectors) and strategic location,

– the gradual transformation of the neighborhood into a business hub should support value appreciation,

– proximity to major roads and residential areas (Gerehu, Hohola, 6 Mile) fuels demand.

Points of caution remain the quality of infrastructure (roads, electricity, water), security, and the need to thoroughly check property titles, especially in areas where the boundary between state land and customary land is complex.

Gerehu: The Boom in Affordable Middle-Class Neighborhoods

Gerehu is cited by the NRI as one of the neighborhoods currently experiencing a real estate “boom.” Located in the northwestern part of the city, it was long perceived as a more popular sector, but rising rents in middle and high-end neighborhoods has pushed many households and workers to settle there.

The reasons for Gerehu’s appeal are simple:

– purchase prices and rents still significantly lower than in Boroko or Korobosea,

– rental demand driven by the general increase in housing costs in Port Moresby,

– relative improvement in infrastructure and services.

Nationally, Hausples surveys show that Gerehu is among, along with Waigani and Boroko, the preferred sectors for buyers and tenants in the National Capital District.

For an investor, Gerehu represents the most interesting face of Port Moresby’s “urban middle class.” Gross yields on 3 or 4 bedroom houses can be higher than in premium sectors, as entry prices remain contained, while rental demand is broad. Moreover, appreciation projections for Port Moresby’s “mid-range” segment, at 5% to 8% per year over five years, are higher than those for luxury neighborhoods.

Boroko, Korobosea and 8 Mile: The Structuring Mid-Range

Boroko and Korobosea embody the established mid-range of Port Moresby. They are historic neighborhoods, equipped with services, schools, shops, where there is strong family demand for 3 or 4 bedroom houses on plots of 300 to 500 m². Purchase prices in these sectors revolve around 800,000 to 2,000,000 kina for a three-bedroom house, depending on condition and precise location.

These sectors present several favorable characteristics:

– strong local demand, supported by population growth and urbanization,

– prices relatively aligned with the capabilities of the upper middle class and well-paid civil servants,

– a lower risk profile than informal or peripheral neighborhoods, while remaining more affordable than Paga Hill or Touaguba.

For an investor seeking a balance between rental security, profitability, and liquidity, Boroko, Korobosea, and the consolidating sectors around 8 Mile constitute prime targets.

Peripheral Areas and Developments on Customary Land

Many recent developments in Port Moresby have been established on customary lands on the periphery: Taurama Valley, ATS, certain parts of 8 Mile and 9 Mile, or the EDAI Town project located 22 km northwest of the capital, between the shipyard and the PNG LNG site.

EDAI Town illustrates an interesting model: a planned private subdivision, approved by the state, but developed through a partnership with the customary landowner communities. The master plan provides housing for a population working in nearby industrial and petroleum areas, with an offer of standardized housing, sometimes in kit or prefabricated form, suited to an intermediate budget.

While these projects offer often lower entry prices than Port Moresby’s urban core, they come with specific risks:

– the legal complexity related to customary land, even when state leases have been created,

– the risk of incomplete or under-dimensioned infrastructure (water, electricity, roads),

– dependence on a major project (e.g., PNG LNG) for rental demand.

For an individual foreign investor, caution dictates prioritizing projects where land titles have been secured, where the state lease or sub-lease is clearly established, and where governance with local communities is stabilized.

Lae: Industrial Capital and Strategic Second Market

Lae, the country’s second city and major port, represents about 10% of the national real estate market. It is the industrial heart of Papua New Guinea: expanding port, industrial zones, agri-food factories, warehouses, logistics activities for the Highlands provinces.

Eriku and Top Town: Rising Residential Market

On the residential side, the Eriku and Top Town neighborhoods are frequently cited as the main investment sectors in Lae. Prices for houses there are generally lower than in Port Moresby’s middle neighborhoods: around 600,000 to 1,500,000 kina for family properties, or nearly 30 to 50% less than in the capital.

For investors, these neighborhoods offer clear advantages:

Security, however, remains an issue, with occasional tensions in certain parts of the city and pockets of squatting. Again, precise location, quality of fencing, security systems, and proximity to main roads are decisive.

Industrial Zones: Scarce Warehouses and High Yields

The industrial zones of Lae suffer from an acute shortage of available land. Demand for warehouses and logistics buildings far exceeds supply, which translates into:

For corporate investors or family offices, Lae is thus a prime location for structuring medium-sized industrial portfolios, betting on the city’s growing role as a logistics hub for the Highlands and mining projects. Infrastructure improvements, such as port extensions and road modernization programs (notably towards Nadzab Airport or via the Highlands Highway program), should support this dynamic.

Secondary Cities: Madang, Kokopo, Wewak, Goroka, Alotau, Mount Hagen

Beyond Port Moresby and Lae, several regional cities offer lower-cost investment opportunities, at the price of lower liquidity and a sometimes more rudimentary environment in terms of infrastructure.

Madang: Tourism, Education and Mid-Range Residential

Madang, a coastal city known for its marine landscapes, combines tourism, universities, and services. Residential real estate prices in the city center (Town Center) are in a range similar to Boroko/Korobosea: 800,000 to 2,000,000 kina for good standard family homes.

In reality, the net entry ticket for comparable assets is often 30 to 50% lower than in Port Moresby, taking into account quality, size, and local demand. This is explained by lower purchasing power and a more limited tenant base, but also by a lesser speculative effect linked to major projects.

Kokopo and Island Towns: Potential Linked to Tourism and Resources

Kokopo, in the New Britain Islands region, benefited from part of the activity transfer after the volcanic eruption in Rabaul. It is a small growing town, with modest tourist and commercial activity, but progressing. Similarly, Alotau (capital of Milne Bay province) or Wewak (capital of East Sepik) remain young markets, where formal real estate is still underdeveloped.

National authorities encourage the creation of special economic zones (SEZ) and public-private partnerships to attract investment to these regions. For now, the real estate market there is mainly dominated by:

– housing for civil servants,

– small commercial activities,

– initiatives by local or regional developers.

Goroka and Mount Hagen: Highlands Towns

Goroka and Mount Hagen, located in the Highlands, are key towns for agriculture (coffee, horticulture) and regional administration. They are among the emerging markets observed by analysts. Housing needs in these towns are driven by:

– state agents,

– agricultural project managers,

– NGOs and international organizations,

– workers linked to road and mining projects.

However, these regions are also exposed to recurrent tribal conflicts and sometimes high levels of crime. For an investor, entering these markets should be considered with strong local partners, rigorous legal security, and a fine analysis of security risks.

Informal Settlements, Security and Urban Segregation: What an Investor Needs to Know

Port Moresby and Lae are experiencing sustained growth of “settlements,” these informal neighborhoods occupying both state and customary lands. Studies by the NRI and international researchers indicate that approximately 45% of Port Moresby’s inhabitants already lived in informal housing in 2010, a proportion expected to rise to more than half by 2030.

Nevertheless, these neighborhoods carry many risks for an investor:

– absence of formal land title, constructions on plots whose ownership is not clarified,

– high probability of land disputes,

– fragility of infrastructure (water, sanitation, electricity),

– increased exposure to crime and community conflicts.

Overall security remains a central issue in Papua New Guinea. Port Moresby, Lae, and Mount Hagen are regularly ranked among the most dangerous cities in the country, with high rates of theft, assault, carjacking, and violence. Some neighborhoods (Gordons, Koki, Erima, certain parts of Gerehu, the area around Parliament in Waigani) are frequently cited as “hotspots” by residents themselves. Institutional investors systematically include dedicated budget lines for security (guarding, fencing, access control, video surveillance) and prefer gated compounds.

Land and Legal Framework: Impact on Neighborhood Choice

A structural element distinguishes Papua New Guinea from the majority of other markets: 97% of the territory is governed by customary law, held by clans, and only 3% corresponds to “alienated” land (state titles or private property) concentrated in cities.

For a foreign investor, the implications are major:

This explains why the best neighborhoods to invest in are most often located in urban areas where titles are already well established: Waigani, Boroko, Korobosea, Town, certain parts of Gerehu, the industrial zones of Lae, the city centers of Madang or Kokopo. In these sectors, the risk of land disputes is lower, even though administrative difficulties and processing times of 3 to 6 months (sometimes over 12 months) remain common.

The government has launched several programs, such as the National Land Development Program and pilot projects (for example at Napa Napa or Taurama Valley), to facilitate the commercialization of customary land. But these mechanisms remain complex, and direct investment on this type of land remains rather the affair of local players or partners already long-established.

Who Buys and Who Rents: Demand Profiles in the Good Neighborhoods

Hausples surveys on the residential market provide valuable insight into the preferences and constraints of households:

– over 80% of buyers need a mortgage loan,

– 85% prefer 3 or 4 bedroom houses,

– the most sought-after plot size ranges between 300 and 500 m²,

– elevated houses (“high-set”) represent over 40% of preferences,

– only 4% of buyers prioritize apartments, but nearly 40% of tenants seek them.

This demand structure explains why “middle” neighborhoods like Gerehu, Boroko, Korobosea, Eriku, or certain sectors of Madang and Lae are strategic:

– they correspond to the core of needs (3–4 bedrooms, average plot),

– they remain within reach of the local upper middle class,

– they offer a deep rental pool (civil servants, technicians, mid-level managers).

For investors in residential rentals, these neighborhoods are often more promising than the ultra-premium segments, especially since appreciation forecasts for mid-range in Port Moresby (5% to 8% per year) are higher than for the very high-end.

How to Choose Between Different Neighborhoods: Some Guidelines

Faced with the diversity of cities and neighborhoods in Papua New Guinea, an investor can structure their thinking around a few simple axes, depending on their risk profile:

In practice, a diversified portfolio can, for example, combine:

– one or two office buildings in Waigani or Gordons,

– 3–4 bedroom houses in Gerehu, Boroko or Korobosea intended for long-term rental,

– a warehouse or logistics complex in Lae,

– and, for the most seasoned investors, a targeted project in a secondary city like Madang or Kokopo.

Conclusion: Choosing the Right Neighborhoods is Choosing Your Risk Level

Investing in Papua New Guinea means accepting a complex environment: strong return opportunities, but also high risks in terms of security, land, infrastructure, and governance. The best neighborhoods are not only those where rents are highest, but especially those where the combination “solid demand + clearer legal framework + manageable security” is most favorable.

In this equation, Port Moresby remains essential, with:

– Paga Hill and Touaguba for the very high-end residential market,

– Waigani and Gordons for offices and commerce,

– Harbour City and Town for prestige assets to be repositioned,

– Gerehu, Boroko, Korobosea and 8 Mile as pillars of the mid-range.

In a country where nearly 97% of the land remains under customary control, where urban growth is rapid, and where official data is still incomplete, the successful investor is the one who knows how to rely on strong local partners, recognized professionals (agencies, lawyers, land experts) and who accepts a patient approach, based on understanding neighborhood dynamics rather than following trends.