Real estate market - 2023 overview

Real estate market - 2023 overview

In 2023, 2.9 billion US dollars worth of apartments were sold in Tbilisi, which is a 9.9% year-over-year increase despite the reduced number of transactions. This increase was caused by the increase in prices in the primary housing market.

According to Galt & Taggart, the area of building permits issued in 2023 has increased by 37% compared to previous years. Almost all apartments of the projects completed in 2023 have already been sold, and in the projects that will be completed in 2026-28, 50% of the total apartments have been sold.

The demand for residential apartments in Tbilisi is still high, and this is due to the following factors:

  • Migration of students to the capital - the number of residents in Tbilisi is constantly increasing, this trend is due to students, because the migration of students from the regions leads to an increase in the demand for housing;
  • Economic growth - the improvement of the country's economic situation and the increase in the average salary of the population increased the demand for comfortable housing, in particular for newly built buildings;
  • Separation of families - the tendency of modern lifestyles is no longer for several generations to live together, which has led to the transition-separation of large families;
  • Investments in real estate - on average 20-25% of the sale of apartments in newly built buildings comes from investment decisions, consumers buy apartments for long-term savings or additional income;
  • Tourist demand - the growing rate of tourism in Georgia has caused interest in real estate among the population. For rental purposes, daily rentals are particularly relevant;
  • Simplified terms of the development company(s) - 0% down payment, 20% or 30% co-payment distribution before the apartment is finished. Also, offering various types of incentives certainly makes it affordable for people with higher than average incomes to buy real estate;
  • Simplified mortgage loan - in most cases, construction companies have a developer bank, through which users have the opportunity to benefit from a simplified mortgage loan from the initial stage of construction, which in turn stimulates sales;
  • State program - "Subsidized mortgage loan", which allows families with many children to receive benefits on mortgage loans.

There was a trend where there was more demand for real estate in central areas. However, this data has changed and the demand has almost equalized both in the central and outer areas.

The number of apartments sold in 2023 by district:

  • Didi Dighomi - 6,755 apartments;
  • Saburtalo - 6,956 apartments;
  • Samgori - 5,797 apartments;
  • Nadzaladevi - 3,700 apartments;
  • Gldani - 4,684 apartments;
  • Didube - 3,212 apartments;
  • Isani - 3,121 apartments;
  • Krtsanisi - 1,372 apartments;
  • Vake - 1,490 apartments;
  • Vashlijvari - 1,057 apartments;
  • Chugureti - 1,026 apartments;
  • Mtatsminda - 779 apartments.

Based on the data of 2023, compared to the previous years, the trend of growth in demand for real estate in Tbilisi is still high.

Also, the data of recent years clearly show the increase in demand for outer areas and hence the rapid pace of their urban development, which is influenced by the following factors:

  • Moving from old buildings to new buildings - moving to new buildings plays an important role in the growth trend of real estate demand;
  • Investment in the suburbs - due to the limited land resources in the central areas of the city, the price of land has increased sharply, which is why the majority of developers direct their resources to the outer areas;
  • Rising prices - rising real estate prices cause people to buy more affordable properties in the suburbs;
  • Change in lifestyle - Some people prefer the more space, the tranquility that the suburbs offer. This is especially important for families with children;
  • Infrastructure development - development of suburbs, construction of new roads, schools, shops and other necessary infrastructure improves the quality of life and attracts more residents;
  • Decentralization of jobs - placing companies outside the city, or the possibility of remote work allows people to live in the suburbs and avoid long commutes to work;
  • Demographic changes - population growth, migration and the start of independent lives of young people increase the demand for living space, including in the suburbs.