In Search of a Conventional Urban Model for Explaining Factors Determining Residential Property Rentals and Prices in Lae City, Papua New Guinea

Abstract

This paper reviews the literature on some conventional urban models that mirror existing patterns of residential property rentals and prices in cities, using Lae City in Papua New Guinea as a case study.The main purpose of the study is to identify which of the conventional models mirror the reality on the ground reflecting the decisions of residential tenants and landlords to live where they are in the city. There are serious concerns relating to spiraling residential property rentals and prices in Lae City that tend to push middle-income and low-income residents to go and live inthe squatter settlements surrounding the city where rents are affordable.Using stratified random sampling technique, arepresentative sample of Lae City residents consisting of 218 landlords and tenants was interviewed in conformity with Covid-19 pandemic restrictions in six (6) different residential districts of the city. These are China Town, Market, Top Town, Cassowary Road, Eriku and Kamkumung, in addition to selected real estate brokersof three popular real estate agencies operating in the city, urban planners working for Lae Municipality and the Department of Lands and Physical Planning (DLPP). The sample represents a mixture of residents in both the formal residential areas and the informal settlements around the city. Survey findings indicate that a plurality of social, economic, cultural and behavioural factors, rather than the overt influence of any conventional urban model of city structure play an overarching role in influencing residential tenants’ and landlords’ behaviour when searching for residence within the city to the extent that many of them now prefer to live in squatter settlements. As confirmed by three tested hypotheses, the study indicates that social factors like security and safety of lives and property, as well as economic factors like inflation and affordability concerns, are the major determinants of residential choice in the city. Recommendations, including policy implications of the study,are put forward regarding measures that need to be thoughtfully implemented in real time by city stakeholders to improve standards of city liveability, sustainability, housing affordability and livelihoods around the country.