Overview of Tbilisi real estate market for Q2 2020

Galt & Taggart company has  published its report on the real estate market of Tbilisi,and according to the analysts, in April and May, after the introduction of a universal quarantine, apartment sales demonstrated drastic decline, however, in June, after the restrictions were lifted, the market began to gradually “revive”. Market activity was also facilitated by the launch of subsidizing the interest rate on mortgage loans, which was introduced starting from July 2020.

Key trends in the Tbilisi real estate market in Q2 2020

Analysts noted the following market trends:

  • residential real estate sales fell sharply in April (-92.7% y / y) and in May (-74.3% y / y) due to quarantine restrictions. As the economy resumed, the decline in sales slowed in June to 21.0% y / y, which indicates the beginning of the recovery. Analysts at Galt & Taggert predict apartment sales in Q2 2020 to retain the level last year, leading to a YoY decline by 15%;
  • mortgage issuance also decreased significantly in April and May 2020, yet banking services revitalized in June;
  • interest rates on mortgage loans rose sharply: in lari denomination – up to 12.8% (+1.2 p.p. from 2019), in foreign currency – 6.0% (+2.1 p.p. from 2019);
  • in April, a sharp increase in real estate prices was recorded – residential real estate prices for an apartment in newly-constructed buildings in April increased by 8.3%, yet in May they decreased by 11.3%, and in June – by another 9.5%;
  • market participants have started to gradually adapt to market conditions – almost 7% of developers revised their pricing policy downward;
  • the rental price decreased by 10.7%, due to the lack of demand from tourists. As a result, the profitability from renting out real estate is decreasing, which will inevitably lead to a decrease in prices on the Tbilisi real estate market.

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The economic outlook: the big picture

The restrictive measures that were introduced to combat the coronavirus have led to a double-digit decline in GDP and a depreciation of the national currency. However, the success recorded by the government in terms of stabilizing the economy and controlling COVID -19 have yielded positive results. Since January, annual inflation has decreased to 6.1% (in June 2020), the National Bank reduced rates twice this year – to 8.25%, plus the lari exchange rate began to strengthen since mid-May. These factors contributed to the growth in demand for real estate in Tbilisi. In June, the consumer confidence index rose by 12.1 percentage points as compared to April, when a record decline was recorded.

Mortgage interest rates

In the first quarter of 2020, mortgages were one of the main drivers in the real estate market of Tbilisi and Georgia. However, under the influence of COVID -19, banks increased interest rates, which led to a decrease in demand for loans. Plus, the adverse economic situation in its turn was not favourable for the citizens to apply for a mortgage.

However, already in the second quarter of 2020, the government launched an interest rate subsidy program, which provides for compensation of the interest rate of 4% over 5 years. It is focused on the primary market, provided that the cost of apartments does not exceed 200,000 lari. This program introcuded to subsidize the interest rate on mortgages will certainly have a positive effect on the real estate market in Georgia.

Trends in the real estate market in Tbilisi

Significant decline in sales transactions during April and May, noticeably halted in June 2020 which, according to many experts,can be considered the beginning of recovery. The suburban areas of Tbilisi were leaders in terms of sales in the 2nd quarter: Gldani, Samgori, Isani and Didi Digomi accounted for 54.2% of all sales for the reporting period.

Residential real estate prices in the capital of Georgia continue to decline. Price volatility was higher in the city center, while the suburbs maintained relative stability.

Average cost of 1 sq.m.  in Tbilisi districts: 

  • Mtatsminda – $ 1,346 (+ 21% YoY);
  • Vake – $ 896 (-6% YoY);
  • Saburtalo – $ 790 (-6% YoY);
  • Nadzaladevi – $ 585 (+ 7% YoY);
  • Gldani – $ 561 (+ 6% YoY).

The sales structure remained practically unchanged. As before, in the segment of newly constructed buildings, medium-sized apartments – 51-80 sq.m.   are in the lead (49% of sales). Experts also note an increased interest in small apartments with an area of 18-50 sq.m.  Sales in this segment increased from 28% to 32% compared to the first quarter. 

In the secondary market, the largest share of sales is also attributed to medium-sized real estate objects.

Regarding the price range, 56% of all transactions falls to the apartment in the low price segment (up to $ 600 per sq.m. ), while the premium segment (from $ 1000 per sq.m.) accounted for about 11% of sales. The quantity of sales transactions by segments in two quarters of 2020 is as follows:

  • Low segment- 1772 objects
  • Medium segment – 1,023 objects
  • premium segment – 343 objects

The demand for medium-sized real estate objects is quite high in all districts of Tbilisi, except for the suburbs (Samgori, Isani, Gldani) were small apartments were leading the sales.For buying and selling real estate in Georgia, contact us [email protected] any time of the day. Our experts will get back to you as soon as possible to provide legal assistance or help you in selecting the best real estate suitable for your requirements.

Can I buy real estate in Tbilisi remotely?

Yes, this service has been in great demand lately. You can buy residential real estate in Tbilisi or in another region of Georgia through a trusted authorized representative. This service is secure, reliable and confidential.

How can I travel to Georgia?

As of early 2020, the country’s land borders are closed. But the Georgian government allowed foreigners into the country travelling for business purposes. To this end, you must have an invitation from a Georgian company and go through a mandatory 14-day quarantine at your own expense.

How long does it take to buy real estate in Georgia?

The transaction and registration of ownership of real estate in the Public Register takes no more than 1 day.


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