Georgian real estate market review for the 1st quarter of 2020

Georgian real estate is inarguably one of the most attractive destinations for foreign investment. A sufficiently large number of non-residents are planning to purchase housing here in order to further lease it out. The capital and resort regions are especially popular among foreigners. The most recently acquired real estate objects are primarily located in Tbilisi, Batumi, Gudauri, Bakuriani, Mestia. However, like other countries at the end of February 2020, Georgia also had to face the coronavirus. Let us look at how the pandemic affected the country’s real estate market based on the ISET report.

Dynamics in the real estate market of Georgia

Compared with IV quarter of 2019, the real estate market in Georgia in the first quarter of 2020 shrank by 21.2%. So, in October-December 2019, 34,602 properties were sold, and in January-March 2020 – 27,273 proprerties. If we compare sales with the same period last year, the decrease is not so drastic – only 4.3%.

Tbilisi remains the leader in sales. So, in I quarter of 2020, 42.8% of all transactions are attributable to Tbilisi, followed by Kakheti (3,441 objects, 12.6%) and Adjara (2,409 objects, 8.8%). Highest growth of sale and purchase transactions was  recorded in Racha-Lechkhumi and Kvemo Svaneti. In this region, the number of transactions compared to the 1st  quarter of 2019 increased by 41.2%. Opposite trend rating was headed by Guria (-25.9%), Adjara (-22.5%) and Samtskhe- Javakheti (-10.5%). In Tbilisi, the decline was only 1.9%.

Most of the transactions, as before, are concluded in the capital (11,686 objects) and in Batumi (2,071 objects). In these cities, more than half of all purchases were concluded. In total, 27 273 objects were sold in Georgia during the reporting period.

Find out more of the reasons why it is profitable to buy real estate in Georgia

Real estate sales by the districts of Tbilisi for the 1st quarter 2020  

The three areas of Tbilisi, where the most deals took place are as follows:

  1. Saburtalo – 2 655 (22.7%);
  2. Vake – 2,050 (17.5%);
  3. Gldani – 1,613 (13.8%).

Next in line are: Samgori (11.6%), Isani (9.1%), Nadzaladevi (7.7%), Didube (6.4%), Mtatsminda (3.1%).

Real estate sales by regions of Georgia for the 1st quarter 2020  

Region Number of sales (units) Growth / decrease compared to last year, (%)
Tbilisi 11,686 -1.9
Adjara 2,409 -22.5
Guria 427 -25.9
Imereti 2 153 -5.9
Kakheti 3,441 -4.2
Mtskheta-Mtianeti 1,260 +3.4
Racha-Lechkhumi and Kvemo Svaneti 226 +41.3
Samegrelo and Zemo Svaneti 1 016 -3.3
Samtskhe-Javakheti 1 012 -10.5
Kvemo Kartli 2,039 +2.5
Shida Kartli 1,604 +9.1
TOTAL 27,273  

As can be seen from statistics, in the I quarter of 2020, 4 regions even recorded sales growth:

  • Mtskheta- Mtianeti – located in the center of Georgia, near Tbilisi, the administrative center is Mtskheta;
  • Racha-Lechkhumi and Kvemo Svaneti – located in the north of Georgia, the capital is Ambrolauri;
  • Kvemo Kartli is located in the south of Georgia, borders with Azerbaijan and Armenia, the administrative center is Rustavi;
  • Shida Kartli – located in the central part of Georgia, the administrative center is Gori.

Regarding the number of sales, here the leaders are unchanged: Tbilisi, Kakheti and Adjara. The last two are resort regions, and Kakheti is also the main wine region. However, it should be noted, that Imereti (center – Kutaisi) is not far from the three leaders at all. This is an industrial region, but with great tourism potential.

In terms of large cities and municipalities, the TOP-5 in sales looks as follows:

  • Tbilisi – 11,686 (42.8%);
  • Batumi – 2,071 (7.6%);
  • Gori municipality – 829 (3%);
  • Gurjaani Municipality – 774 (2.8%);
  • Telavi municipality – 763 (2.8%).

The market for new buildings in Tbilisi in the I quarter of 2020  

In the 1st quarter of 2020, 137 new buildings with a total area of ​​178,944 m were commissioned in the capital of Georgia. This is less compared to the same period last year, both in the number of objects (-39.9%) and the area (-49.1%).

Of the 137 constructed buildings, 106 are residential (94,171 sq.m.), 7 are multifunctional complexes (29,255 m ) and 24 are commercial facilities (55,519 sq.m.).

For comparison, in 2019, the dynamics of completion of new buildings was as follows: I quarter – 228 buildings (351.3 sq.m.), II quarter – 177 buildings (405.8 sq.m. ), III quarter – 191 buildings (298.4 sq.m.), IV quarter – 202 buildings (331.2 sq.m.).

The dynamics of real estate prices in Tbilisi in the I quarter of 2020  

In the 1st quarter of 2020, no drop in housing prices in the Georgian capital was recorded, even despite the pandemic. In the period January-March, the consumer price index for housing increased by 5.8% in USD and by 4.6% in lari terms as compared to the 4th quarter of 2019.

During the 1st quarter of 2020, the average price of 1 sq.m. real estate ranged from 930 to 1041 USD, and the rental price – from 7.3 to 7.5 USD. 

In the reporting period, real estate prices increased in absolutely all areas of Tbilisi, but the growth leaders were Chugureti (+ 20%), Isani (+ 17.9%) and Mtatsminda (+ 16.2%). The latter remains the most expensive area – USD 1,255 per sq.m., the most affordable is Samgori ( USD 624 per sq.m. ):

District Name Average cost of m (USD)   Change compared to the same period in 2019
Mtatsminda 1255 16%
Vake 1118 13%
Saburtalo 976 9%
Chugureti 948 20%
Krtsanisi 943 5%
Didube 844 6%
Isani 823 18%
Nadzaladevi 675 8%
Gldani 659 13%
Samgori 624 2%

Also, rental prices increased in the 1st quarter – most of all in Gldani (32.8%) and Nadzaladevi (+ 21.8%). The most expensive rental is in Mtatsminda (8.8 USD per sq.m. ), and the lowest price in Gldani is 5.0 USD per sq.m.

District Name Average rental price per sq.m. (USD)  Change compared to the same period in 2019
Mtatsminda 8.8 13%
Vake 7.9 12%
Krtsanisi 7.6 15%
Chugureti 7.0 13%
Isani 7.0 7%
Saburtalo 6.9 4%
Didube 6.1 10%
Nadzaladevi 5,6 22%
Samgori 5.5 14%
Gldani 5,0 33%

The dynamics of prices for commercial real estate in Tbilisi in the 1st quarter of 2020

The average cost of 1 sq.m. of  commercial facilities in the reporting period amounted to 1,148 USD, which is 8% less compared to the 4th quarter of 2019, but at the same time more by 17.3% compared to the same period in 2019. 

The average rental price of 1 sq.m.  was 9.4 USD, which is 3.2% more compared to the 4th quarter of 2019 and more by 6.1% compared to the same period in 2019. 

Real estate in Batumi and Kutaisi in 1st quarter of 2020

In the reporting period, sales on the real estate market in Batumi and Kutaisi significantly decreased compared to the 4th quarter of 2019, respectively, by 46% and 12.4%. The number of transactions in Batumi was – 2 017, in Kutaisi – 714. However, when compared with the same period in 2019, in Kutaisi there was an increase of 6.6%.

But at the same time, the average housing price in Batumi increased by 9.0% (up to 837 USD per sq.m.), in Kutaisi, however, the dynamics of prices is reversed – a decrease of 9.8% (up to 459 USD per sq.m. ).

If you are interested in real estate in Georgia, write to us by mail: info@offshore-pro.info  and we will find you a profitable investment object.  

Do Russians need to notify the tax authorities about the purchase of real estate in Georgia?

Russians, other than civil servants, do not need to notify tax authorities about the purchase of real estate in Georgia. However, it is necessary to report the opening of accounts and cash flows.

What is remarkable about the Vake and Mtatsminda districts in Tbilisi?

These are the most prestigious districts in Tbilisi, it houses the central offices of large international companies, embassies, fashion boutiques. It is in these areas that the Georgian elite prefers to settle: businessmen, politicians, artists. The Mtatsminda is also entertainment park and close to the historic center of Tbilisi.

From what price of residential real estate can non-residents qualify for a residence permit of Georgia?

Foreigners get the right to a temporary residence permit of Georgia subject to the purchase of real estate worth from 100,000 USD. Its validity period is 1 year, but with the right of annual extension, subject to the ownership of real estate, the value of which exceeds the specified limit. It is necessary to contact the Agency for the Development of Public Services in 40 business days.


Tags:

You are welcome to review other interesting articles on Georgiawealth.info: