Papua New Guinea's housing market is influenced by a multitude of factors, ranging from economic indicators to demographic trends. Understanding the determinants of housing prices in the country is essential for policymakers, investors, and homeowners alike. In this article, we will explore the key factors shaping housing prices in Papua New Guinea using an Autoregressive Distributed Lag (ARDL) approach.

Economic Context Of Papua New Guinea:

Papua New Guinea's economy is characterized by its dependence on natural resources, particularly minerals, and agriculture. Economic growth, inflation rates, and exchange rate fluctuations play a significant role in shaping the housing market dynamics in the country. Additionally, factors such as population growth, urbanization, and government policies influence the supply and demand for housing, thereby impacting housing prices.

Methodology: Autoregressive Distributed Lag (Ardl) Approach:

The ARDL approach is a widely used econometric technique for analyzing the long-term relationships between variables. In the context of housing prices in Papua New Guinea, the ARDL model allows us to examine the impact of various economic and demographic factors on housing prices over time. By estimating the coefficients of these factors, we can assess their significance and magnitude of influence on housing prices in the country.

Key Determinants Of Housing Prices:

Economic Growth: Economic growth is a significant driver of housing prices in Papua New Guinea. Higher economic growth rates are often associated with increased household income, leading to greater demand for housing and upward pressure on prices.

Inflation Rates: Inflation rates influence housing prices by affecting the cost of construction materials, labor, and financing. High inflation rates may lead to higher construction costs, thereby pushing housing prices upward.

Interest Rates: Interest rates impact housing affordability and demand for mortgage loans. Lower interest rates typically stimulate housing demand, leading to higher prices, while higher interest rates may dampen demand and constrain price growth.

Population Growth: Population growth and urbanization drive housing demand in Papua New Guinea. As the population expands and urban centers grow, the demand for housing increases, exerting upward pressure on prices.

Government Policies: Government policies, such as housing subsidies, taxation, and regulations, also influence housing prices. Policies that promote homeownership or restrict land development can impact the supply-demand dynamics in the housing market, affecting prices accordingly.


In conclusion, understanding the determinants of housing prices in Papua New Guinea is crucial for stakeholders seeking to navigate the country's real estate market. Through the application of econometric techniques such as the ARDL approach, researchers can analyze the relationships between various economic and demographic factors and housing prices over time. By identifying key drivers of housing prices, policymakers can develop targeted interventions to address affordability challenges, promote sustainable urban development, and ensure a stable and inclusive housing market in Papua New Guinea.