Residential
Updated: December 21, 2020
In November 2020, 2,760 transactions were registered in Tbilisi, that is 3% higher than the previous year. As for the market size, the figure stands at USD 116 million, reflecting an 8% decrease compared to the same period in 2019.
November 2020 vs. 2019
Updated: December 21, 2020
The number of transactions recorded on medium and premium new apartments is 26% and 49% less than the same period in 2019. As for the economy segment the number of transactions has increased by 14% and amounted to 2,318.
November 2020 vs. 2019
Updated: December 21, 2020
The number of new apartment transactions is 17% lower than the same period in 2019, while the number of transactions registered on old flats has decreased by 26% and accounts for 7,816 units.
Jan-Nov 2020 vs. 2019
Updated: December 21, 2020
In the period Jan-Nov in 2020, the market size of new flats is 22% less than the same period in 2019 and accounts for USD 753 million, while the figure for old flats is 27% lower and amounts to USD 309 million.
Updated: December 21, 2020
The weighted average selling price of new flats in the period of January-November 2020 is USD 671 per sq m, reflecting a 5% decrease, when compared to the same period in 2019. As for the old flats, the WAP accounts for USD 636 per sq m, depicting an insignificant 0.5% decrease.
Jan-Nov 2020 vs. 2019
Updated: December 21, 2020
In the period Jan-Nov in 2020, the market size of new flats is 22% less than the same period in 2019 and accounts for USD 753 million, while the figure for old flats is 27% lower and amounts to USD 309 million.
Mar 22-Nov 31 2020 vs. 2019
Updated: December 21, 2020
The weighted average selling price of new flats in the period of January-November 2020 is USD 671 per sq m, reflecting a 5% decrease, when compared to the same period in 2019. As for the old flats, the WAP accounts for USD 636 per sq m, depicting an insignificant 0.5% decrease.
Mar 22-Nov 31 2020 vs. 2019
Updated: June 4, 2020
We have divided the residential market into the following price segments: Economy, Medium, and Premium. We have further analyzed the base scenario with moderate isolation until the end of 2020.
The prices of economy segment residential properties are not expected to change significantly , while the number of transactions in this category is forecast to drop. We expect the demand on economy class single-family houses to soar in the isolation period.
The projections are negative for the medium segment residential market in terms of the number of transactions and prices. Speculative transactions are expected to increase in the medium market due to decreased prices.
The number of transactions is expected to drop in the premium segment, but we anticipate very little price change in this category. The market of rental properties will be most affected, as both, prices and the number of transactions are expected to drop by the end of the year.
*Distressed Real Estate with potential to increase prices
Economy - Apartments < $800 per m². Private Houses - < $70,000
Medium - Apartments $800 - $1,200 per m²; Private Houses - $70,000 - $200,000
Premium - Apartments +$1,200 per m²; Private Houses: > $200,000
As long as lockdown measures are in place, it is hard to comment on the market response in terms of residential pricing. While the new-built market shows signs of a price reduction, secondary market pricing is still on hold.
A decrease in selling prices could put developers that offer internal installment plans at risk. Particularly in cases when only a small portion of a contract amount is paid, buyers will feel reluctant to continue their payments for already devalued properties. Based on initial consultations with developers, installment payments have diminished significantly during the lockdown period. In order to regain trust, it is vital for developers to demonstrate an uninterrupted construction process. Banks will have an important role to play in ensuring flawless funding for committed-to projects.
In the short-term, it is highly likely that the number of transactions will drop, especially in touristic areas such as: Batumi, Bakuriani and Gudauri. Approx. 11,500 transactions were recorded in Batumi in 2019, most of which were investment properties. Similarly, property transactions in Gudauri and Bakuriani have predominantly investment purposes.
The market for investment / rental apartments will face challenges. Significant price reductions are expected for both rental and sale property. On the other hand, this reduction may inspire a new wave of speculative investors who are active during the crisis period.