TBC Capital Presents Residential Real Estate Sector Analysis Results
On March 27, the representatives of TBC Bank held a presentation of the results of the Residential Real Estate Sector Analysis at the Sheraton Grand Tbilisi Metechi Palace. The decision to carry out the study was made based on the growing demand of market participant developers to have accurate and relevant information about the sector. Nino Tskhadaia, the Head of Research and Brokerage of TBC Capital, welcomed the guests and briefed them about aim of the study.
“Within the scope of the research, we mostly concentrated on the capital city,” she said. “However, we clearly understand that there are many interesting regions for you, as the major players of the market, and these we will introduce to you.”
Vakhtang Butskhrikidze, the CEO of TBC Bank, then took to the stage to speak about the importance of the presentation and the future plans of the Bank.
“Corporate Business represents one of the main priorities of TBC and we aim to establish and enhance the long-term cooperation with this sector,” he said, adding that, “The Real Estate field is one of the fundaments of the Georgian economy.” The CEO also expressed his gratitude to Tbilisi City Hall for having delivered accurate and vital statistical data to enable them to carry out the research. He then focused on the goals of TBC Bank to facilitate the business management process for companies and the lives of customers, with the goal of having 10 million clients by 2022.
At the end of his speech, Butskhrikidze announced some news regarding Silknet, the partner of TBC and one of the largest companies operating in Georgia, who has successfully placed Euro-Obligations worth EUR 200 million.
The results of the TBC Capital study were as follows:
The volume of the Tbilisi residential real estate market amounted to 4.1 billion GEL in 2018, of which 65% was driven by newly constructed apartment transactions. The real estate of apartments increased by 31%, contributed to by the availability of mortgage loans, as well as new regulations announced by the National Bank. The number of approved mortgage loans in January 2019 reduced by 47% in comparison with the same period of the previous year.
In 2018, a major increase in demand was seen on premium and medium segment apartments. The majority of sales in the central districts of the city came as a result of the demand for apartments with greater square-meterage, while sales of relatively small flats dominated in the suburbs.
Due to the recent changes in the regulatory system of the construction field, the number of permits issued for the construction of real estate decreased by 45% compared to the previous year. Pursuant to the TBC Capital investigation, the reduction of permits will be reflected in the completion of construction by 2021.
In comparison with the previous year, the average price for transactions in 2018 increased by 6%, and in 5% in USD. Mtatsminda holds the status of most expensive district of the capital city.
Compared to similar cities, prices in Tbilisi are lower in the suburbs, as well as in the city center, which indicates the possibility for future growth. In the longer term, TBC Capital predicts the slow and steady augmentation of residential real estate prices, with a balanced growth to be maintained in the short-term.
TBC Capital is the subsidiary and licensed brokerage company of TBC Bank offering investment banking services to customers. Since 2017, TBC Capital has been a part of TBC Bank’s corporate and investment banking business. The main business decisions of the company are financial consultations and credit, rating services, issuance of bonds and shares, investment research and brokerage activities.
After the speeches delivered the by the representatives of TBC Bank, the presentation continued in a discussion format.
By Ketevan Kvaratskheliya