Quarterly Report Shows Georgia’s Real Estate Hot Spots

The ISET Research Institute, in partnership with TBC Bank, recently released a quarterly report as part of the Real Estate Laboratory Report series.

The report showed a slight positive growth of 0.1% in the first quarter of 2018 from Q4 2017 in the Georgian real property market. Year-on-year (y/y), there was a 27.2% increase compared to Q1 2017. In total, there were 27,495 properties sold in Georgia in the first three months of 2018. Tbilisi drove the increase, with 41.6% of total sales nationwide this quarter. Regionally, the large, eastern region of Kakheti, dominated by agricultural land, had the second highest portion of sales with 11.1%. The Adjara region followed, with 9.9% of sales.

The region with the highest y/y sales growth was Racha-Lechkhumi and Kvemo Svaneti, which saw an enormous 105% increase, followed by Guria at 66.9%, and Kakheti with 31.7%. More than half of all sales in Georgia were registered in Tbilisi and Batumi – the two largest cities. In Q1 2018, real property sales in the capital grew y/y by 37.1%, with the national market, excluding Tbilisi, growing by 21%.

In Q1 2018, the real property markets in Batumi and Kutaisi decreased by 11.0% and 6.1%, respectively, from the previous quarter. Batumi and Kutaisi are the second and third biggest cities of Georgia after Tbilisi. Batumi saw 2,377 property transactions and Kutaisi had 677. In Q1 2018, the average sale prices in Batumi increased by 2.4 % quarter over quarter, to $772 per square meter, and in Kutaisi increased by 4.4% quarter over quarter to $391 per square meter.

The report also included detailed data on sales within Tbilisi and revealed the most popular and most expensive neighborhoods. Saburtalo saw the highest number of sales with 2,924 properties, followed by Vake with 1,978, and Samgori with 1,286. 148 new properties were constructed in Tbilisi in Q1, totaling 200,200 m2, which is down from the first quarter of 2017 - 23.7% in the number of properties and 33.5% in area built.

Regarding real estate prices, Tbilisi saw continued increases from the previous quarter both in the sale and rental markets. Property sales increased by 5.1% from Q4 2017 and rental prices increased by 1.4%. The average sale price citywide was $860– $906 per square meter, and rentals were an average of $6.7– $7.7 per square meter per month. Prices of course vary by neighborhood. For residential properties, Mtatsminda tops the list for sales and rentals, with sales averaging $1,078 per square meter. The lowest average prices for residential properties were in Samgori (sales at $529 per square meter) and Gldani (rentals at $4.40 per square meter). Buying an apartment in Saburtalo, cost an average of $874 per square meter, and Vake, the capital’s second most popular neighborhood, cost an average of $998 per square meter.

After three quarters of falling commercial sale prices, Q1 2018 saw a 12.2% increase from Q4 2017. The rental price index, however, continues to decrease. In Q1 2018, one square meter of commercial property sold for an average of between $1,099 and $1182, or rented for between $8.7 and $9.6.

By Samantha Guthrie

18 June 2018 18:25
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