Published on and written by Cyril Jarnias
Papua New Guinea intrigues. A country of more than 600 islands, exceptional biodiversity, and countless cultures, it has long attracted divers, trekkers, and travelers in search of authenticity. But behind this image of a far-off destination lies another, more discreet face: that of a niche real estate market, where the second home—be it a vacation house or a rental pied-à-terre—is beginning to find its place.
The local real estate market is promising and potentially profitable, but it presents major challenges. An investor or individual wishing to acquire a second home must anticipate legal, land tenure, security, and infrastructural obstacles. The central question isn’t just the yield, but also the cost in complexity and the investment conditions.
A pioneering real estate market in a dual-economy country
Papua New Guinea is regularly described as a “frontier” real estate market in the Asia-Pacific region. With approximately 9.4 million inhabitants, of which only 13% live in urban areas, an economy heavily dependent on extractive resources (mining, oil, export agriculture), and a GDP of around US$27.9 billion, the country sits at the crossroads of contradictory dynamics.
The current inflation rate in Papua New Guinea, which is around 6.9%.
The real estate market reflects this duality. Cycles are closely correlated with major resource projects: price surge from 2010 to 2015 during the PNG LNG project boom (annual appreciation of 15 to 20%), correction between 2015 and 2019, decline during the pandemic (–5% to 0%), then recovery since 2023 with estimated annual increases of between 5 and 8%. For second homes intended for rental or personal use, the challenge is therefore as much about choosing the right segment as it is about correctly “timing” entry and exit.
Almost entirely customary land: the core issue for second homes
Anyone interested in a second home in Papua New Guinea immediately encounters a structuring reality: approximately 95 to 97% of the territory consists of customary land, collectively held by clans or tribes according to their own rules. Only a small fraction, around 3%, corresponds to “alienated” land, meaning land registered in the formal land tenure system and thus available for conventional real estate projects.
Customary land, which is not surveyed and is inalienable, is governed by traditional mechanisms that are often a source of conflict. For a foreign investor, direct acquisition is prohibited. Access can only be obtained through the state, which must first acquire an interest in the land before being able to sublease it.
Conversely, almost all modern residential and tourist projects, including those potentially akin to future second homes (coastal villas, city apartments, island bungalows), are developed on this small deposit of alienated land, either through freehold ownership (reserved for citizens) or via long-term state leases. It is on this very narrow segment that the bulk of formal supply for foreign buyers plays out.
To broaden the scope of available land, the government has launched the National Land Development Program (NLDP) and pilot projects, such as the one at Napa Napa near Port Moresby. The goal is to transform portions of customary land into state leases, negotiated with traditional landowners. However, these mechanisms are progressing slowly and are not yet changing the structural reality: the scarcity of secure land remains a major obstacle to the development of a large second home market.
A legal framework open to investment, but restrictive on ownership
The legal foundation of land ownership is based on the Land Act of 1996, the Constitution (notably its Article 53 on property protection), and a set of specific laws (Customary Land Recording Act, Land Dispute Resolution Act, Land Titles Commission Act, etc.). The registration system adopts a Torrens model: once a title is registered, it constitutes nearly irrefutable proof of ownership.
But several elements need to be clearly understood by a foreign investor considering a second home.
In Papua New Guinea, full land ownership (freehold) is, with rare historical exceptions, exclusively reserved for national citizens, under the Land (Ownership of Freeholds) Act. Non-citizens cannot hold it directly. Some titles can be converted into leases for indirect exploitation. Furthermore, local banks place little value on this type of title as financial collateral, further limiting its usefulness for a foreign investor.
Secondly, the primary tool for foreigners is the state lease. Leases can run for up to 99 years, are renewable, and are issued for a specific purpose: residential, commercial, agricultural, pastoral, urban, etc. Applications are made before a Land Board, which issues a recommendation to the Minister for Lands, the sole authority empowered to approve or refuse the grant. Any transfer of a lease to a non-citizen requires his explicit approval before registration.
Foreign investment is regulated by the Investment Promotion Act and overseen by the Investment Promotion Authority (IPA). A company where more than 50% of the capital is held by non-citizens must obtain certification as a “foreign enterprise,” with a minimum investment of 100,000 kina (approximately US$28,000). It must also appoint at least one resident director and comply with various reporting obligations. A proposed bill, the Foreign Investment Regulatory Authority Bill, could tighten these rules in the future by restricting certain sectors and strengthening controls.
Within this framework, the acquisition of a second home most often takes an indirect form: creation of a local company controlled by the investor, obtaining the IPA certificate, then acquisition of the lease and construction via this entity. From an immigration standpoint, no “golden visa” is offered in exchange for a real estate purchase; pathways to residence are through business visas, work visas, permanent residence linked to a substantial investment or a long-term legal presence in the country.
High prices and contrasting yields across segments
Recent figures illustrate the paradoxical nature of the market: on one hand, high prices relative to local incomes; on the other, rental yields that can be attractive in certain niches, particularly those of interest to buyers of second homes for rental purposes.
Data from real estate portals and market studies indicate the following price ranges for purchasing residential properties in 2025:
| Location / Property Type | Price Range (PGK) | Estimated Range (USD, approx.) |
|---|---|---|
| Port Moresby (Paga Hill / Touaguba) – Executive Residence | 4,000,000 – 8,000,000 | ~1.1 M – 2.2 M |
| Port Moresby (Boroko / Korobosea) – 3-bedroom house | 800,000 – 2,000,000 | ~225,000 – 560,000 |
| Lae (Eriku / Top Town) – Residential property | 600,000 – 1,500,000 | ~170,000 – 420,000 |
| Madang (coastal areas with tourism potential) | 500,000 – 1,200,000 | ~140,000 – 335,000 |
At the same time, affordability indicators are particularly severe. The price-to-income ratio is estimated at 131.5, meaning the average house price represents more than 130 times the average annual income, a level far higher than that observed in most developed markets. The price-to-rent ratio in central Port Moresby reaches about 40, and nearly 68 in the periphery. Unsurprisingly, more than half of surveyed residents find the market “very unaffordable,” with 70% of the urban population being tenants.
The maximum gross rental yield that can be achieved by staff housing compounds for companies in mining and gas project areas in Papua New Guinea.
A summary table allows you to visualize these disparities:
| Market Segment | Estimated Gross Rental Yield |
|---|---|
| Premium Residential (Port Moresby) | 8 – 12 % |
| Mid-range Residential | 10 – 15 % |
| Staff Housing Compounds | 15 – 20 % |
| Accommodation in Resource Project Areas | 18 – 25 % and above |
| General Residential Market (overall data) | 1.4 – 2.5 % |
This gap is explained by the structure of demand: the expatriate and corporate clientele is willing to pay a premium for secure, well-serviced housing with amenities (generators, water tanks, private security). In contrast, the classic local market, where the ability to pay is more limited, does not allow for the same level of profitability on already very high acquisition prices.
Second homes straddling tourism and long-stay accommodation
Speaking of a “second home” in Papua New Guinea often means being at the intersection of two markets: that of tourist accommodation (short stays, diving, trekking, cultural events) and that of medium- or long-term housing for expatriates, consultants, NGOs, resource companies, and the emerging local middle class.
Tourism remains modest in volume, the country being one of the least visited in the world. The lack of infrastructure, the reputation for crime in some cities, and transportation difficulties deter some travelers. Yet the potential is undeniable: world-class dive sites at Kimbe Bay, Tufi, or Milne Bay; landscapes of tropical fjords; spectacular cultures animating festivals like the Mount Hagen Show; traditional art of the Sepik Valley; paradise islands off Kavieng or Rabaul.
The state, aware of the tourism potential, has launched the Tourism Sector Development Project (TSDP), supported by the World Bank. Managed by the Tourism Promotion Authority (TPA) and the Ministry of Tourism, Arts and Culture, this project aims to improve planning, environmental and social management (via an ESMF framework including provisions for indigenous peoples and resettlement), and to fund small tourism infrastructure in targeted provinces like East New Britain and Milne Bay, particularly around the towns of Kokopo, Rabaul, and Alotau.
In this context, second homes can take different forms:
Examples of investment and mixed-use properties, combining rental yield and occasional personal use.
Used occasionally by a regional investor and rented out the rest of the time to companies or on short-term rental platforms.
Operated as a guesthouse or lodge for divers and tourists, and reserved for personal use a few weeks per year.
Integrated into a small eco-tourism complex, sometimes on a community model.
Combining residential, hotel accommodation, and leisure activities, with a high-end positioning.
The short-term rental market itself remains emergent. Platforms like Airbnb are present, and listings can be found for temporary accommodations in Goroka, Kokopo, Madang, Wewak, Rabaul, or Port Moresby (“Oceanview” in the capital, entire houses in Wewak, apartments in Kokopo, etc.). However, the regulatory framework for short-term rentals is not really stabilized: it results from a mix of general national regulations (urban planning, taxation, health standards) and local customary practices. For an investor aiming for a “vacation home + Airbnb income” model, regulatory uncertainty and the need for strong local relationships are major elements to factor in.
Port Moresby, epicenter of the market and showcase for major projects
Port Moresby concentrates the bulk of the formal residence market, whether primary or secondary. The city, which had over 400,000 inhabitants in 2015, is both the main economic engine and the showcase for the country’s real estate ambitions.
One finds a variety of neighborhoods that directly or indirectly interest the second home clientele. Historic middle-income sectors like Boroko or Korobosea; business and upscale neighborhoods like Town or Paga Hill; more accessible suburbs like Waigani, Gerehu, or 8-Mile, where new subdivisions and residential complexes are multiplying.
The average sale price per hectare of land in Port Moresby, in kina, illustrating the high pressure on urban land.
The explosion of rents between 2008 and 2012, fueled by the construction boom linked to the PNG LNG project, highlighted the scale of the imbalance between supply and demand. The construction of apartments and houses did not keep pace with rising needs, partly due to a lack of secure land, skilled labor, and materials (often imported). This tension continues to be felt, even though some high-end segments experienced an adjustment after the boom.
Port Moresby is the preferred destination for second home investment in Papua New Guinea, thanks to its accessibility via the international airport, its complete infrastructure (shopping malls, international schools, private hospitals), and strong rental demand from businesses and international officials. The development of structured projects like Paga Hill Estate, a mixed residential, hotel, commercial, and leisure district benefiting from special economic zone status, also offers opportunities.
The planned waterfront apartments within Paga Hill, the future Radisson Blu, the casino under development, and the waterfront promenade help paint a more “classic” image of a premium coastal neighborhood, likely to appeal to wealthy second home buyers. But this image should not obscure the city’s structural realities: pockets of insecurity, massive informality in peripheral neighborhoods, uneven road networks and public services.
Secondary cities, coastlines, and islands: the “vacation” face of the market
Beyond the capital, several regions offer a typically “vacation home” profile, with certain potential for a second home, provided one accepts more complex logistics and more uncertain resale liquidity.
Coastal towns in Papua New Guinea, such as Madang, Alotau (capital of Milne Bay Province), Kokopo, Rabaul (East New Britain), and Kavieng (New Ireland), combine sea access, attractive landscapes, and proximity to internationally renowned dive or fishing sites. Establishments like Nusa Island Retreat or Lissenung Island Resort, located off Kavieng, are internationally recognized for the quality of their beaches and reefs. Their model relies on traditional bungalows integrated into the environment, illustrating an eco-tourism approach.
These projects, often established before the rise of rental platforms, illustrate the type of product that can inspire second homes: small stilt houses, constructions using treated local wood, vernacular architectures adapted to the tropical climate, sometimes organized as family or community structures rather than classic condominiums.
Madang, with its bays, islets, and old hotels, also offers opportunities to acquire residential properties with tourism potential, in a price range lower than Port Moresby. Similarly, Alotau and the islands of Milne Bay attract a clientele of divers and boaters who appreciate the relative isolation and authenticity of coastal villages.
In these regions, the typical profile of a second home is often that of a mixed-use property: a personal vacation house and paying accommodation during the off-season or when the owner lives abroad. Short-term rental demand is more seasonal than in the capital, but it benefits from the appeal of a Papua New Guinea perceived as an unspoiled adventure destination, far from the crowds of Bali or Thailand.
A fragile infrastructure framework, weighing on second home value
Infrastructure constraints constitute a central dimension of the second home market. Incomplete or impassable roads part of the year, failing electrical and water networks, limited digital connectivity, high costs of sea or air transport: these realities directly impact daily life in a vacation home, the profitability of a rental project, and long-term valuation.
This is the percentage of paved national roads in Papua New Guinea, out of a total network of approximately 8,738 km.
On the energy side, the grid is fragmented into three main systems (Port Moresby, Ramu for Lae–Highlands–Madang, and Gazelle for the New Britain archipelago) supplemented by a multitude of isolated mini-grids. Power outages are frequent, line losses are high, and many private generators ensure service continuity, especially for high-end residences. Access to a stable internet connection is also rare: international capacity, until recently, consisted of only two submarine cables totaling 2.5 Gb/s for more than 7 million inhabitants, whereas a country like Singapore, with a comparable population, enjoys dozens of terabits per second.
Approximately 61% of the population lacks access to safe drinking water and 55% are without improved sanitation facilities. Access via piped water in rural areas is 15 to 18 times lower than in cities, implying for second homes the use of tanks, treatment systems, septic tanks, and substantial maintenance budgets.
These factors translate into operating costs far higher than those in better-equipped tourist markets. Private security, maintenance of autonomous infrastructure (generators, solar panels, pumps, filtration systems), frequent repairs, surcharges for transporting materials and consumer goods: the annual “bill” for a second home can quickly rise, eating up a significant portion of expected yields.
A tense security environment, conditioning the use of residences
The perception of insecurity in Papua New Guinea, often fueled by incidents of carjacking, armed attacks, burglaries, and urban violence, is not just a cliché. The statistical reality shows a flourishing private security sector: more than 400 companies, nearly 30,000 employees, and estimated revenue of over one billion kina, making this sector the country’s third-largest employer. Four out of five companies report using security guards.
For a second home, prioritize safe neighborhoods and gated, monitored compounds. Plan for secure travel via private transport services with GPS tracking, and equip the home with alarm and video surveillance systems. The exact location, beyond attractions like views or activities, is a determining factor.
This security dimension also influences the clientele. Upscale apartments and houses in Port Moresby are highly sought after by companies, which house their expatriates there under long-term lease contracts. For a second homeowner willing to rent out their property, these corporate clients can offer relatively stable occupancy and high rents, in exchange for strong requirements regarding safety and services.
On coastlines and islands, well-managed small tourist complexes that maintain good relations with communities manage to maintain a peaceful atmosphere. However, lack of knowledge of customs, latent land disputes, or a sense of exclusion can weaken this relationship in the long term. The sustainability of a second home rental project therefore relies on strong local anchoring: partnerships with customary landowners, creation of local jobs, and sharing of benefits.
Strong local demand and a tight rental market
Even when focusing on second homes, it is impossible to ignore the reality of local demand. Surveys conducted by portals like Hausples show that 70% of residents are tenants, only 20% are outright owners, and 9% are repaying a loan. The majority find the market “unaffordable,” with strong demand for housing under 200,000 kina, far exceeding available supply.
Tension in the housing market leads to the proliferation of informal settlements. These areas house a significant portion of the urban workforce, including low-income wage earners and some middle-class households, who do not have access to affordable formal solutions. In these neighborhoods, construction quality, access to services, and legal security for occupants are often precarious.
For second homes, this reality has two consequences. The first is ethical and political: in a country facing an acute housing crisis, the multiplication of properties intended for vacation or luxury rental can be perceived as exacerbating inequalities and may cause tensions if not accompanied by tangible local benefits (jobs, community contributions, social projects). The second is more pragmatic: strong rental demand, even in mid-range segments, can help secure an income stream for a well-located and well-managed second home, provided the pricing remains appropriate.
For a second home intended for long-term rental, the preferences of local households should guide the design: prioritize raised houses (high-set), plan for three or four bedrooms, opt for plots of 300 to 500 m², and design robust, functional spaces that can accommodate large families, as one-third of households have more than six people.
Transaction costs, taxation, and financial constraints
The acquisition and holding of a second home in Papua New Guinea come with significant transaction costs and recurring charges. For a foreign buyer, the total sum of fees is generally estimated at between 5% and 10% of the purchase price. These notably include:
The stamp duty rate on property transfer in Papua New Guinea, representing 2% of the transaction value.
To these entry costs are added recurring charges: annual land rent (often around 5% of the unimproved value of the land), income tax on rental earnings (30% rate for resident non-mining companies, higher for non-residents), 10% Goods and Services Tax (GST) applicable to certain services, 2% training levy for companies above a certain payroll threshold.
Local banks offer advantageous mortgage loans for citizens, but these products are generally inaccessible to foreigners. When financing is exceptionally granted to a non-resident, it requires a high down payment (30 to 50%) and interest rates are between 8 and 15%. In practice, most purchases by foreigners are therefore made in cash, with the constraints related to exchanging the kina, a controlled currency subject to delays and foreign currency shortages.
A market slowly structuring around private players and public initiatives
Despite the constraints, the Papua New Guinean real estate market is gradually structuring under the impetus of several types of players: private developers (Steamships, Curtain Bros, Paga Hill Development Company, Lamana, etc.), local pension funds (Nambawan Super, Nasfund), real estate agencies (LJ Hooker, Century 21, Strickland Real Estate, The Professionals, Hausples), and public authorities (Department of Lands and Physical Planning, Investment Promotion Authority, Real Estate Industry Association).
Specialized market studies (6Wresearch, Statista) and annual surveys (Hausples) document household expectations, budgets, and preferences, as well as their feelings on affordability and available supply. Major exhibitions, like the Hausples Real Estate Expo, also bring together key sector players (developers, banks, insurers, buyers).
For now, the second home is not a segment explicitly named in these analyses, as the market remains dominated by issues of primary housing, staff housing, and corporate rental parks. But the signals are multiplying: growing interest from certain international investors (several thousand property searches from abroad, notably from the United States), gradual development of short-term rentals, multiplication of niche coastal projects, integration of a residential dimension into special economic zones like Paga Hill.
To develop this market, two actions are essential: progressively improve land tenure security and infrastructure in key tourist and urban areas, and establish a clearer regulatory and tax framework for seasonal rentals. This would provide visibility to owners while protecting the interests of local communities.
A highly specific second home destination
In the end, the second home market in Papua New Guinea cannot and should not be approached as a simple extension of models observed in other Pacific countries. Where Vanuatu, for example, highlights relatively low construction costs, favorable taxation, and a growing supply of coastal Airbnbs, Papua New Guinea offers a completely different set of parameters: massively customary land, incomplete infrastructure, more pronounced insecurity, but also high potential yields in specific segments, unparalleled natural and cultural wealth, and a sense of “outpost” for investors ready to navigate a complex environment.
For those considering a second home – personal refuge, exploration base, or rental investment – three key elements emerge from the available data.
A residence conceived as a haven of peace and a place of renewal for oneself and one’s family.
An anchor point for discovering and enjoying a new region, its landscapes, and its culture.
A property that can generate complementary income through renting, whether year-round or seasonally.
The first is the necessity of thorough preparation: a detailed understanding of land law, systematic recourse to an experienced local lawyer, verification of titles and leases with the Land Titles Commission, consideration of security costs and autonomous infrastructure, prudent cash flow projections that account for operating costs.
The second is the crucial importance of local anchoring: partnerships with developers and operators already established on the ground, dialogue with customary communities when the project touches their land or resources, use of professional property managers for rentals, involvement in tourism or social initiatives that strengthen the project’s acceptability.
The value of a second home in this country, whether in Port Moresby or on a remote island, is subject to high cyclicality and volatility. It depends primarily on the evolution of mining and gas projects, public development policies, the security situation, the state’s capacity to improve infrastructure (roads, energy, telecoms), and the country’s international image as a tourist destination.
For those seeking a clearly marked and predictable vacation spot, other markets will better meet the demand. For those, however, seeking a pioneering investment, at the frontier between adventure tourism, yield-producing real estate, and immersion in one of the world’s most singular countries, the Papua New Guinea second home market offers terrain that is as demanding as it is fascinating.
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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.
