Real Property Sales

The Georgian (GEO) real property market grew by 10.1% in Q2 2018, in comparison with Q1 2018. The annual increase was more pronounced at 22.7% (YoY), in comparison with Q2 2017.

Tbilisi (TBS), with a 44.0% share in total sales in Q2 2018, dominated the GEO real property market.

The TBS market was followed by Kakheti and Ajara, with a 10.2% share in GEO sales for both regions. The highest annual increase (YoY) in sales was observed in Racha-Lechkhumi and Kvemo-Svaneti (120.0%), Mtskheta-Mtianeti (57.6%), and Tbilisi (35.8%).

In Q2 2018, TBS real property sales grew annually by 35.8%, and overall, the market outside TBS caught up and grew by 14.0%.

More than half of GEO sales were registered in the two largest cities: Tbilisi and Batumi.

For Q2 2018, the TOP 3 regions by sales in GEO were:

TBS (13 331 units, 44.0%)

Kakheti (3 081 units, 10.2%)

Ajara (3 080 units, 10.2%)

For Q2 2018, the TOP 3 districts by sales in TBS were:

Saburtalo (3 527 units, 26.5%)

Vake (2 279) units, 17.1%)

Gldani (1 407 units, 10.6%)

REAL PROPERTY SUPPLY

167 new buildings with a total area of 336,000 sq.m were completed in TBS during Q2 2018. The real property supply in TBS slowed down with respect to the number of buildings (-15.2% YoY), but grew for the total area of buildings (31.3% YoY).

The slowdown in total supply has been driven by a -22,9 % decrease (YoY) in the supply of commercial buildings (28 units with a total area of 53 K sq.m). 139 (-13.5%) units with a total area of 283 K sq.m (34.6%) have also been added to the residential property supply in TBS.

RESIDENTIAL PROPERTY PRICES HLIGHTS

In Q2 2018, Sale Price Index (SPI) and Rent Price Index (RPI) for residential properties experienced an increase of 0.1% quarterly (QoQ) and 5.6% (QoQ), respectively.

During this quarter, Average Sale Price (ASP) varied between USD 868 and USD 881 per sq.m (monthly average), and Average Rent Price (ARP) was between USD 6.2 and USD 7.7 per sq.m (monthly average). Quarterly averages are USD 875 for ASP and USD 6.98 for ARP.

In Q2 2018, ASP increased (YoY) in all TBS districts except Krtsanisi and Samgori. The highest increase was observed in Nadzaladevi and Didube, by 15.2% and 15.1%, respectively. ARP showed various patterns for various districts. The highest drop was in Mtatsminda, by-12.5% (YoY).

Due to the new law requiring pricing of real estate in GEL, prices in local currency stabilized starting in Q3 2017, while prices in USD became more volatile, reflecting exchange rate fluctuations.

In Q2 2018, the most expensive and cheapest districts of TBS were, by ASP: Mtatsminda (USD 1 124) and Samgori (USD 547); by ARP: Mtatsminda (USD 7.70) and Gldani (USD 4.62)

COMMERCIAL PROPERTY PRICES

Maintaining its upward trend, in Q2 2018, SPI increased by 2.5% (QoQ), reaching 0.890 index points. RPI increased as well, by 24.7% (QoQ) to 1.068 index points.

During Q2 2018, ASP varied between USD 1,050 and 1,224 per sq.m, and ARP between USD 9.03 and USD 10.11 per sq.m. Average ASP for commercial properties increased by 8.0%(YoY), and reached 1,138 USD per sq.m. ARP declined by -7.3% (YoY) and dropped to 9.61 USD per sq.m in Q2 2018.