Real Property Sales

The Georgian (GEO) real property market grew by 2.4% in Q3 2018, in comparison with Q2 2018. While the annual increase was more pronounced at 24.3% (YoY), in comparison with Q3 2017.

Tbilisi (TBS) dominated the real property market with a 44.4% share in total sales in Q3 2018.

The Tbilisi market was followed by Ajara and Kakheti, with a 10.1% and 8.7% proportion of GEO sales, respectively. The highest annual increase (YoY) in sales was observed in Racha-Lechkhumi and Kvemo-Svaneti (70.1%), Samtskhe-Javakheti (44.4%), and Tbilisi (37.7%).

In Q3 2018, TBS had an annual growth of 37.7% in real property sales, while the market outside TBS began to catch up and grew by 15.4%.

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

For Q3 2018, the TOP 3 regions by sales in GEO were:

TBS (13 7711 units, 44.4%)

Ajara (3 131 units, 10.1%)

Kakheti (3 080 units, 8.7%)

For Q3 2018, the TOP 3 districts by sales in TBS were:

Saburtalo (3 724 units, 27.7%)

Vake (2 212) units, 16.1%)

Gldani (1 668 units, 12.2%)

REAL PROPERTY SUPPLY

In total, 179 new buildings with an area of 253,665 m2 were completed in TBS during Q3 2018. The real property supply in TBS slowed both in respect to the number of buildings (-22.2% YoY) and the total area of buildings (-35.6% YoY).

The slowdown in total supply has been driven by a -42.2% decrease (YoY) in the supply of commercial buildings (37 units with a total area of 150 km2). A further 142 (-14.5%) units, with a total area of 103 km2 (-40.8%), have also been added to Tbilisi’s residential property supply.

RESIDENTIAL PROPERTY PRICES HLIG

H In Q3 2018, Sale Price Index (SPI) and Rent Price Index (RPI) for residential properties experienced an increase of 5.1% quarterly (QoQ) and 0.5% (QoQ), respectively.

During this quarter, Average Sales Price (ASP) varied between 831 USD and 949 USD per m2 (monthly average), and Average Rent Price (ARP) was between 7.1 USD and 7.9 USD per m2 (monthly average). The quarterly averages are 872 USD for ASP and 7.0 USD for ARP.

For Q3 2018, ASP increased (YoY) in all Tbilisi’s districts, except Samgori. The highest increase can be observed in Nadzaladevi and Didube, 12.4% in both areas. ARP revealed various patterns for various districts. The highest drop was in Mtatsminda, by -13.9% (YoY), while the highest jump was in Samgori, by 19.0% (YoY).

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

In Q3 2018, the most expensive and the cheapest districts of Tbilisi by ASP were: Mtatsminda (1099 USD) and Samgori (546 USD); and by ARP: Mtatsminda (7.72 USD) and Gldani (4.68 USD)

COMMERCIAL PROPERTY PRICES

Maintaining its upward trend, SPI increased by 10.4% (QoQ) in Q3 2018, reaching 0.982 index points. RPI increased as well, by 37.6% (QoQ), to 1.470 index points.

During Q3 2018, ASP varied between 993 and 1086 USD per m2, and ARP between 9.35 and 9.87 USD per m2. The average ASP for commercial properties increased by 1.7 % (YoY), and reached 1092 USD per m2. While ARP declined by -2.3% (YoY) and dropped to 9.72 USD per m2.