Comparison of Real Estate Prices Across Cities in Papua New Guinea

Published on January 17, 2026 and written by Cyril Jarnias

Surging rents and the acquisition cost of housing have become part of daily life in Papua New Guinea. But behind this general impression of “real estate being too expensive,” the disparities between cities are considerable. Port Moresby, Lae, Madang, Mount Hagen, or Kokopo do not offer the same price levels at all, nor the same prospects for investment returns or accessibility for households.

Port Moresby, Capital of a Tight Real Estate Market

Port Moresby alone accounts for about 85% of the country’s real estate market. It is the most expensive city, the most dynamic, but also the least affordable for most residents. Research shows that it was the big winner during the boom phase linked to the PNG LNG project, then underwent a correction phase after 2015, without prices falling to a level considered reasonable by the population.

Listings compiled by researchers from the PNG National Research Institute over one year (2015–2016) provide a first idea of the scale of prices. During this period, weekly rents for a house in Port Moresby ranged from 550 PGK to 8,000 PGK per week, with an average rent around 2,146 PGK and a median of 1,700 PGK. For purchases, the gap is even more dramatic: between 160,000 PGK for the most modest properties and 23 million PGK for high-end properties, particularly in premium neighborhoods and for large plots of land.

Rents That Far Exceed Average Incomes

More recent data, from platforms like Hausples or cost-of-living databases, confirm the overall expensiveness of the capital. For a one-bedroom apartment downtown, monthly rents recorded around 2025 are based on amounts that far exceed the average net salary, estimated at about 1,646 PGK per month.

Housing Type	Location	Average Monthly Rent (PGK)	Observed Range (PGK)
1-Bedroom Apartment	Downtown	12,818	6,500 – 20,538
1-Bedroom Apartment	Outside Downtown	2,000	1,000 – 3,000
3-Bedroom Apartment	Downtown	13,286	4,500 – 23,000
3-Bedroom Apartment	Outside Downtown	3,000	1,500 – 4,000

Even considering the lower end of the range for central neighborhoods, it’s clear why more than 80% of potential buyers need a home loan and why 80 to 87% of respondents to Hausples surveys consider the market “unaffordable”. The overall price-to-income indicator reaches 131.5, an extremely high level, and the price-to-rent ratio exceeds 40 in central Port Moresby, climbing to nearly 68 in the outskirts. In short: it takes decades of rent to “pay off” a purchase, making standard residential investment very heavy for a household, even a middle-class one.

Port Moresby Neighborhoods: Paga Hill, Waigani, Boroko and Others

Not all addresses in Port Moresby are created equal. The city is highly segmented, with very strong disparities between prestige areas, office districts, residential suburbs, and informal settlements.

City / Sector of Port Moresby	Property Type	Price Range (PGK)
Paga Hill / Touaguba (premium)	High-End Residence	4,000,000 – 8,000,000
Waigani / Hohola (commercial)	Office Building	3,000,000 – 15,000,000
Korobosea / Boroko (mid-range)	3-Bedroom House	800,000 – 2,000,000

Neighborhoods like Paga Hill and Touaguba Hill, perched with views of the harbor, concentrate the most luxurious housing, highly sought after by expatriates and senior executives. Waigani and Hohola, close to ministries and major offices, are more in the niche of office and commercial real estate. Boroko, Korobosea, or Gerehu represent so-called “mid-range” residential markets, where three-bedroom houses commonly sell for between 800,000 and 2 million kina.

For local households, these amounts remain largely out of reach. Surveys conducted in 2019 show that nearly a quarter of potential buyers are only willing (or able) to pay up to 200,000 PGK for a house, while 37% are targeting the 200,000–400,000 PGK range. At the other extreme, only one-fifth see themselves going beyond 500,000 PGK, far from the 800,000 to 2 million observed for “standard” houses in the good neighborhoods of Port Moresby.

Informal vs. Formal: Two Parallel Markets in the Capital

The contrast between market prices and the real financial capacity of residents partly explains the explosion of settlements in informal housing developments. A 2019 study by researchers from the University of Technology in Lae on informal rental markets in Port Moresby and Lae suggests that nearly half the urban population of these two cities lives in “settlements” without formalized land titles.

Comparing this rent of 700 PGK to an average net salary</strong of about 1,646 PGK, the ratio remains high, but significantly more sustainable than in the formal sector, where a simple studio in a good neighborhood easily exceeds 5,000 PGK monthly. In practice, the capital's real estate market therefore operates at two speeds: an extremely expensive, secure, and equipped formal segment (generators, fences, guards, backup water), and an ocean of significantly cheaper precarious housing, but exposed to insecurity and lack of infrastructure.

Lae, Second City and a Slightly Cheaper Alternative

Lae, the country’s second city and main industrial hub, represents about 10% of the national real estate market. It is a strategic location for industry and logistics, situated at the outlet of the road to the Highlands, which boosts demand for warehouses, offices, and staff housing.

Available data shows that Lae is generally more affordable than Port Moresby, even though price levels remain high relative to local incomes. Cost-of-living comparisons indicate that Lae is on average a bit cheaper than Port Moresby, the latter being about 7% more expensive than Lae in aggregated indices.

Sale Prices: Levels Lower Than Port Moresby

Regarding sales, the characteristic price ranges are significantly lower than in the capital:

City / Sector	Property Type	Price Range (PGK)
Lae – Eriku / Top Town	Residential Property	600,000 – 1,500,000
Lae – Industrial Areas	Warehouse / Factory	1,200,000 – 3,000,000

Where a three-bedroom house sells for 800,000 to 2 million kina in mid-range neighborhoods of Port Moresby, a comparable house in the Eriku or Top Town area of Lae trades more in the 600,000 to 1.5 million range. The gap is clear, but remains limited for modest households, who in any case rarely have access to credit.

Rental Market in Lae: High Pressure But Scarce Data

Detailed data on rents in Lae is much rarer than for Port Moresby. Hausples also notes that, for Lae as well as the capital, some trend statistics (medians by number of bedrooms, rental yield by property type) are marked “insufficient data.” The lack of transparency and the importance of the informal market complicate the analysis.

However, field research conducted in Lae settlements (Boundary Road, Bumbu, Kamkumeng) reveals comparable rents to those in Port Moresby’s informal neighborhoods, with the same gap between the quality of constructions (often very basic) and prices. In these areas, many houses are built on customary land, sometimes more legally stable than occupations of state or private land, which encourages some owners to invest a bit more in durable constructions.

For industrial companies, however, the on-the-ground reality is quite different: lack of available buildings, near-full occupancy of warehouses and workshops, and upward pressure on commercial space rents. Specialized sources describe Lae as a “full capacity” market, where most warehouses and industrial buildings are leased, and where the scarcity of available land complicates any new project.

Madang, Mount Hagen, Kokopo: Secondary Markets and More Contained Prices

Beyond the Port Moresby–Lae duo, medium-sized cities like Madang, Mount Hagen, or Kokopo each occupy a specific niche, with overall price levels lower than those of the capital.

Madang: Between Coastal Tourism and Commercial Real Estate

Madang, a coastal city known for its landscapes and tourism potential, offers a fairly varied price range depending on whether one is talking about commercial properties downtown or seafront properties intended for tourism.

The following ranges have been recorded for 2025:

City / Sector	Property Type	Price Range (PGK)
Madang – Downtown	Commercial Property	800,000 – 2,000,000
Madang – Coastal	Property with Tourism Potential	500,000 – 1,200,000

These price levels remain significant in the country’s context, but are clearly lower than the premium values in Port Moresby. On the rental side, concrete listings give a fairly precise idea of the mid-range residential rental market in Madang.

Property in Madang	Characteristics	Weekly Rent (PGK)
“Ela Villas” – Coastwatchers Ave	Furnished 2-Bed / 1-Bath Apartment	1,375
“Shrina Apartments” – Yabob Road	Furnished 3-Bed / 1-Bath Apartment	1,150
Duplex – Coralita Street, Kalibobo	Renovated 3-Bed / 1-Bath Duplex	1,000
“Khushi Apartments” – off Kalibobo Drive	Furnished 2-Bed / 1-Bath Apartment	825
House – Baitabag Hill	3-Bed / 1-Bath House	750

Monthlyizing these amounts (on a simple 4-week basis), this places a 3-bedroom house in Baitabag Hill around 3,000 PGK per month, and a furnished two-bedroom apartment at just over 3,300 PGK monthly. These are therefore rent levels comparable to some mid-range neighborhoods in Port Moresby, but in a much smaller city profile, and often with a clientele oriented towards businesses, NGOs, or passing visitors.

Mount Hagen and Kokopo: Moderate Prices but Yield Potential

Mount Hagen, a major Highlands city, and Kokopo, the urban center of East New Britain, illustrate another facet of the market: purchase prices lower than in Port Moresby, but rental demand supported by the local economy.

City / Sector	Property Type	Price Range (PGK)
Mount Hagen – Downtown	Mixed-Use Building	700,000 – 1,800,000
Kokopo – Urban Area	Residential Compound	600,000 – 1,400,000

For investors willing to move away from major centers, these markets offer several advantages: a lower entry cost, less competition than in regional capitals, and significant needs for decent housing near mining, agricultural, or service activities. Specialized guides also estimate that cities like Wewak, Goroka, or Alotau offer acquisition prices 30 to 50% lower than those in Port Moresby, while showing medium-term appreciation prospects of 4 to 7% per year.

Staff Housing and Mining Project Zones: Prices in a League of Their Own

Another “market within the market” deserves special attention: that of staff housing in mining and gas project zones. Around major extraction projects, the need for on-site team accommodation generates very specific demand, with high rents and sometimes spectacular yields.

Estimates for 2025 indicate, for these project zones:

Zone / Sector	Property Type	Price Range (PGK)
Resource Project Zones	Staff Housing Compounds	1,000,000 – 4,000,000

In these contexts, gross yields can climb to 18–25% and more, well above the 8–12% observed on high-end residential properties in Port Moresby, or the 10–15% on mid-range residential in urban areas. The trade-off is a more pronounced risk profile: dependence on a single project, possibility of a sharp drop in rents after the construction phase, and regulatory or land uncertainty. Analyses of the country’s past cycles remind us that the price and rent peaks observed between 2010 and 2015, driven by the PNG LNG project, were followed by a correction phase, notably in the luxury residence segment in Port Moresby.

Property Types, Security, and Hidden Costs: What Makes Up the Prices

Comparing prices between cities also requires looking at what lies behind each kina paid. In Papua New Guinea, an apartment in a secure compound with a generator and guards is not directly comparable to an isolated house without fencing or backup systems.

Apartments, High-Set Houses, Duplexes, Compounds: The Residential Palette

The formal residential market is mainly structured around six major categories:

– Standard apartments (on a single level, subdivided in a building);

– High-end “serviced” apartments, furnished and with services (pool, gym, maintenance);

– Townhouses on two levels sharing a common wall;

– Duplexes (two adjoining units);

– Individual houses of the “high-set” (on stilts) or “low-set” (single-story) type;

– Compounds: enclosed residential groupings with several units, sometimes of various types.

Security and Services Heavily Weigh on the Bill

Regardless of the property type, security and service reliability weigh very heavily on price formation. In cities considered high-risk in terms of urban crime, like Port Moresby or Lae, most mid- and high-range formal housing includes:

– Guards on duty 24/7;

– Fencing, perimeter walls, barbed wire;

– Grilles on windows, reinforced doors;

– Alarm systems;

– Electrical generators to compensate for frequent power cuts;

– Backup water tanks to cope with supply problems.

In this context, the price gap between cities also stems from the cost of these complementary services. Port Moresby, where security and comfort requirements are highest, sees its rents inflated by these charges. In Madang or Kokopo, where the environment is perceived as slightly less tense, some owners can afford slightly less costly installations, which is reflected in the rents.

Why Port Moresby Is (and Will Remain) Much More Expensive

Several structural mechanisms explain why Port Moresby displays prices significantly higher than other cities in the country, whether for rent or sale.

A Marked Imbalance Between Supply and Demand

On one hand, housing demand in Port Moresby continues to increase, driven by the cumulative effect of population growth, urbanization, and the influx of workers to the capital to find jobs, access better health or education services, or join the administration. The city’s population, already estimated at over 400,000 inhabitants in 2015, is projected by local authorities to exceed one million by 2030.

This land supply blockage combines with very high construction costs. Most construction materials must be imported, which increases project costs due to transport costs, customs duties, the local inflation level, and fluctuations in the kina. Shortages of skilled labor, the cost of construction companies, and the need for developers to finance infrastructure themselves (roads, water, electricity, sanitation) further inflate the bill.

The Leverage Effect of the LNG Boom and Major Projects

Macroeconomic analyses conducted on the 2000–2018 period show that real estate prices react strongly to macroeconomic conditions. A 1% increase in real GDP would, on average, lead to a progression of about 1.63% in prices over time. Similarly, an expansion of housing credit stimulates demand: when the share of housing loans in total private lending increases, prices rise.

When the effects of this boom subsided, a correction occurred: high-end rents fell by up to 30%, and mid-range housing saw rents decrease by 10 to 20%. But prices never returned to the “pre-boom” level. The contraction mainly affected the very high end, leaving the housing access difficulties for the majority of the population intact.

Credit, Interest Rates, and Limited Policy Room for Maneuver

While the overall economy and credit clearly influence prices, academic work also emphasizes that monetary policy has a limited effect on the real estate market. The central bank’s policy rate (Kina Facility Rate) is only weakly transmitted to household financing conditions, due to the underdeveloped structure of the mortgage market.

Comparing Cities: Price, Yield, and Accessibility

To gauge the differences between cities, it is useful to juxtapose, in summary form, the main orders of magnitude for purchase prices by property type in the principal urban centers.

City / Region	Main Property Type	Indicative Price Range (PGK)
Port Moresby – Premium	Luxury Residence (Paga/Touaguba)	4,000,000 – 8,000,000
Port Moresby – Mid-Range	3-Bed House (Boroko/Korobosea)	800,000 – 2,000,000
Lae – Eriku / Top Town	Residential Property	600,000 – 1,500,000
Madang – Downtown	Commercial Property	800,000 – 2,000,000
Madang – Coastal	Property with Tourism Vocation	500,000 – 1,200,000
Mount Hagen – Downtown	Mixed-Use Building	700,000 – 1,800,000
Kokopo – Urban Area	Residential Compound	600,000 – 1,400,000
Mining Project Zones	Staff Housing	1,000,000 – 4,000,000

These figures reveal several constants:

On the rental side, a precise comparison is trickier due to a lack of systematic comparable data between cities. However, available elements suggest a similar hierarchy: Port Moresby at the top, Lae next, then regional cities, and finally secondary areas or informal settlements, where rents remain lower but in conditions of comfort and safety far inferior.

Rental Yields and Appreciation Prospects According to City

For an investor, the appeal of each city is not limited to the purchase price: rental yield and long-term capital gain potential fully come into play. Recent sector studies provide yield estimates by segment type rather than by city, but this data can be combined with the geographic mapping.

According to these analyses:

In terms of medium-term appreciation (over five years), projections mention:

These figures confirm a sort of “yield-risk-city triangle”: Port Moresby remains the essential hub, Lae plays the role of a second pole with strong commercial momentum, and secondary cities or mining project zones offer high yields but with specific risks (lack of liquidity, dependence on one sector, fragility of local economic fundamentals).

Housing Accessibility: A Shared Problem, Amplified in Port Moresby

While cities clearly differ in their price levels, they share a common point: the difficulty for local residents to access quality housing in the formal sector. Survey and national survey data paint a severe picture.

In the 2024 and 2025 Hausples surveys:

– 80% of respondents consider the real estate market “unaffordable”;

– 87% judge prices “too high”;

– 70% of the country’s inhabitants live in rented accommodation, only 20% are outright owners, and 9% are repaying a loan.

Household preference heavily leans towards three or four-bedroom houses (85% of desires), on plots of 300 to 500 m², ideally in neighborhoods served by water, electricity, roads, and services. But the reality of prices, especially in Port Moresby, severely limits the realization of these aspirations.

In practice, households make trade-offs: moving away from the center and expensive neighborhoods to find more affordable rents (at the cost of longer commutes and sometimes lower service quality); accepting informal housing conditions; or going deeply into debt to access a property in the formal sector, with still-high interest rates.

What Price Differences Between Cities Say About the Market’s Future

Comparing real estate prices between cities in Papua New Guinea allows for a better understanding of where the future challenges lie.

Port Moresby will undoubtedly remain the most expensive city in the country for a long time, driven by its status as the political and economic capital, the concentration of skilled jobs, and its role as a hub for foreign investors. But its price level, already far removed from household capabilities, makes developing more affordable housing solutions essential, including in peripheral or satellite areas where land is less expensive. It is in these peripheral arcs that the next price movements are already partly playing out.

Madang, Mount Hagen, Kokopo, and other regional urban centers are in an intermediate zone: lower prices, but often even more limited purchasing power. Their real estate development will largely depend on the authorities’ ability to secure and mobilize customary land for well-framed projects, and on the success of local economic projects (tourism, agriculture, services).

In the background, the comparison between cities mainly highlights a central point: without a better-framed release of land, a reduction in construction costs, and broader access to affordable financing, the gap between real estate prices and incomes will remain considerable throughout the country, with Port Moresby at the forefront. For households, this means continued pressure on the formal rental stock and the persistence of a massive reliance on informal settlements. For investors, this implies a potentially very profitable market, but one requiring a fine-grained approach, city by city, neighborhood by neighborhood, according to risk profile and long-term prospects.