Residential market in Adjara
In 2023, the total number of apartments sold in Batumi reached 15,758 units, indicating a 7.5% y/y decrease. This decrease could be attributed to a record-high 2022 base and weaker migrant outflow. Notably, this reduction was mainly due to decreased apartment sales on the primary market (-10.0% y/y), while sales on the secondary market decreased at a relatively lower rate. However, number of sales in 2023 still represents a significant 29.6% increase compared to the 2021 level.
The majority of apartments (42.0% of total sales) were purchased in the New Boulevard Area, playing a significant role in the overall high sales volume. Notably, 60.1% of the transactions in this district took place on the primary market. This can be attributed to the concentration of new development projects in the New Boulevard Area - 67 out of the total 155 residential projects in Batumi. Given the scarce land resources in Batumi, the growth of real estate development initially occurred in the nearby areas of the city, Gonio-Kvariati and Makhinjauri. Currently, it has expanded further along the coastal line of Adjara, encompassing areas such as Chakvi, Tsikhisdziri, Kobuleti, and Shekvetili. Remarkably, in 2023, there was a significant surge in total apartment sales in Kobuleti (+59.5% y/y) Moreover, sales are expected to further grow in Kobuleti with 22 ongoing residential projects at the moment.
In January 2024, we conducted a survey of 6 systematic developers with 19 ongoing construction projects in Batumi. The aim was to address delays in the registration of apartment sales on the primary market and stay informed about the real time market trends. Based on survey results, total apartments purchased directly from surveyed developers decreased by 2.8% y/y, which can be explained: 1) record-high base in 2022; 2) low stock of apartments in the projects due for completion in 2024-28 as 78% of apartments are already sold out; 3) shift of real estate development from Batumi to other locations in Adjara, evidenced by increased number of projects in Kobuleti (incl. Chakvi and Tsikhisdziri). Notably, share of foreigners in total sales was up to 80% in 2023 from 75% in 2022.
