Real Estate

In October 2024, based on official registrations, transactions in Tbilisi increased by 12.8% y/y and 6.3% m/m, reaching 3,750 units. However, a real-time survey of developers indicates a slowdown in demand. Sales among selected developers in Tbilisi fell by 10.9% m/m and by 11.8% compared to 4M24 average, period of strong sales. This decline is attributed to domestic political instability. Additionally, primary market prices in October rose slightly by 0.3% m/m, reaching $1,307.

After record-high demand in 2022-2023, Batumi real estate market experienced a slowdown in 2024. This decline can be attributed to several factors, including a gradual outflow of migrants, rising prices, high interest rates, and domestic political instability. Despite these challenges, Batumi’s real estate market remains one of the highest-yielding in comparison to many peer cities, and prices continue to rise, albeit at a slower pace.

In September 2024, demand for real estate continued to improve. Prices in September increased slightly by 0.1% m/m after 0.3% m/m increase in August. On the supply side, the volume of construction permits has stabilized in the last two months, although it still remains lower by 23.6% y/y, partially reflecting last year's high base. The dynamics of permit issuance are expected to remain steady through the end of 2024, with future trends determined by the strength of demand.

In August 2024, demand for real estate continued to improve, but it still remains sluggish compared to the beginning of the year. Prices in August increased slightly by 0.3% m/m on the primary market, after remaining flat in July. Weakened demand is also affecting supply - over the past three months, the volume of permits issued for construction has decreased sharply, by 41.9% y/y. Permit issuance dynamics are likely to be maintained by end of 2024 as developers await until demand improves considerably.
 

In July 2024, demand for real estate improved, but still remained sluggish compared to 4M24. As a result of weakened demand, price growth decelerated - Jul-24 was the first month when prices remained completely flat m/m, since the beginning of 2022. Sluggish demand also affected supply - in the June-July period, permit issuance decreased drastically by 58.2% y/y and 40.3% y/y, respectively. Permit issuance dynamics are likely to be maintained by end of 2024 as developers await until demand improves considerably.

Residential market in Adjara

In 2Q24, the total number of registered transactions in Batumi reached 3,670, indicating a 6.7% y/y decrease. Notably, sales reduced on both, primary and secondary markets (-3.3% y/y and -11.0% y/y, respectively). Sales decreased in every district of Batumi, except New Boulevard Area (+4.9% y/y).

Number of transactions
In Jun-24, the number of sold apartments in Tbilisi stood at 2,957 units, down 21.9% y/y and 7.5% m/m. Notably, sales have decreased in both the primary and secondary markets.

Prices
In Jun-24, monthly price increase on the primary market was only 0.1%, which is the lowest increase in the last 30 months. The slowdown in the price growth pace is slightly more noticeable in the premium segment projects. 

Number of transactions

In May-24, the number of sold apartments in Tbilisi stood at 3,197 units, down 7.9% y/y and 0.7% m/m. The decline can be attributed to the numerous public holidays in May-24 and domestic political tensions. Unstable environment and subsequent fluctuation of GEL exchange rate, prompted some potential home buyers to postpone their decisions and to wait until the situation stabilizes, in our view.

Prices

Number of transactions

In Apr-24, the number of sold apartments in Tbilisi stood at 3,220 units, up 24.7% y/y and up 7.7% m/m. Strong annual growth is explained by last year’s low base effect. 

Prices

In Apr-24, prices increased monthly for new projects (both, primary and secondary markets). 

Market size

Presales from developers

Based on survey results of selected developers, around 20% of the real estate projects that started in 2018-19 remain unsold, while almost 60% of the projects that began in 2020-21 are completely sold out. Notably, in the real estate market of Adjara during 2023-24, Georgian citizens accounted for 20% of total sales, while citizens from Russia and Israel comprised 24% and 6%, respectively. The remaining half of apartment sales involved a diverse range of countries.