What are the trends in the real estate market in Tbilisi and who is buying property?

Economic growth of Georgia

In recent years, Georgia has been showing active growth in its economy, which is linked to the attraction of foreign investments. This significantly simplifies the process for foreigners in purchasing real estate, registering businesses, and obtaining permits for temporary or permanent residency.

Flow of foreign investments

Most market experts believe that in 2020, the volume of foreign direct investment will continue to remain high. This is influenced by two main factors:

• New transportation routes:The opening of new transport routes for interregional trade contributes to the growth of trade turnover through countries such as Turkey, Azerbaijan, and Iran.
• Investments from foreign entrepreneurs:A significant amount of financial resources is coming from foreign entrepreneurs who intend to invest in Georgia and develop their activities here.

Growth of the construction sector

The construction sector in Georgia, as well as the hotel and restaurant business, is showing significant growth. For example, investments in the construction sector have increased by 114%, while investments in hotel and restaurant services have risen by 58%. This noticeable interest in Georgian real estate indicates that demand for housing will remain high over the next 5-10 years.

Prospects of the real estate market in Tbilisi

Currently, the real estate market in Tbilisi is showing optimistic trends. Experts note that among the capitals of the CIS countries, Georgia stands out with a high growth rate in the residential real estate market. There is a significant increase in demand for housing from both local residents and foreign citizens.

Popular neighborhoods in Tbilisi

In Tbilisi, many neighborhoods are popular, but the most attractive ones are:

• Wake
• Faith
• Saburtalo
• Isani
• Digomi
• Didube
• Historical zones

In each of these areas, you can notice a concentration of certain ethnic groups. For example, the Navtlugi district and part of Ortachala are mainly populated by Azerbaijanis, while the Armenian community is actively settling in Avlabari and Isani. Georgians and Russians tend to choose areas like Saburtalo, Vake, Mtatsminda, Sololaki, and Vera.

New settlements and infrastructure

Over time, new buildings have started to appear in areas relatively far from the city center. These places are becoming increasingly popular due to their developed infrastructure, availability of parks, and affordable prices.

Increase in sales volume

The volume of sales in the Tbilisi real estate market is growing not only among local residents but also among tourists, which positively impacts the development of the sector. As Tbilisi attracts travelers year-round, the demand for apartments in popular tourist areas is increasing.

Investments in hotel services

Some entrepreneurs, recognizing the potential of these areas, are starting to acquire apartments and entire buildings, transforming them into hostels and hotels for tourists. This contributes to the further development of urban infrastructure and the economy of Georgia as a whole.

Conclusion

Thus, the real estate market in Tbilisi continues to actively develop, offering wide opportunities for both local residents and foreign investors.

The current situation in the real estate market of Tbilisi

Currently, Tbilisi is experiencing an excess of real estate listings, which in turn is leading to a decrease in prices for hotel rooms and hostels. Such conditions may reduce interest in purchasing residential properties. Given the current economic situation, many financially capable citizens prefer to live outside the city limits, opting for individual houses or townhouses.

People who choose this lifestyle make up about 20-30% of the entire population of the capital, while they keep their apartments located in the city.

Preferences of real estate buyers

When searching for real estate, potential buyers pay increased attention to characteristics such as:

• the presence of green islands;
• level of construction quality;
• development of infrastructure.

While there is a growing interest in high-end housing, experts express concerns about a potential decline in demand for apartments located in buildings constructed in a "infill development" format, where there is a lack of comprehensive infrastructure and the only view from the windows is of other balconies.

In the future of the real estate market in Tbilisi, analysts predict new residential projects, and increased competition is contributing to the improvement of the quality of services offered.

Trends in the construction of residential complexes

Moreover, there has been a consistent trend lately towards the construction of residential complexes for the middle class, in which approximately 10% of the capital's population currently resides. Typically, buyers prefer apartments ranging from 50 to 100 square meters, while larger apartments are starting to lose popularity due to the significant costs associated with their maintenance.

Such larger-scale properties are particularly relevant for hostels, especially if they are located in tourist areas, where prices start at $180,000.

Restrictions on construction in the city center

According to current state standards, the possibilities for development in the city center are strictly limited, and the construction coefficients in these areas remain low, making such projects less economically attractive. As a result, many developers continue to show interest in residential areas, such as:

• Marketing;
• Your Jvari;
• Didi Digomi;
• Samgori;
• Isani;
• Bagebi.

In Tbilisi, studio apartments are still the main focus of construction, but there is a growing interest in residential units with separate kitchens.

The construction services market and mortgage lending

As of today, the construction services market in Tbilisi is represented by more than 300 companies offering a variety of options. In recent years, developers have started providing their customers with internal installment plans for periods of up to several years, with minimum down payments ranging from 5% to 30%.

This is related to changes in mortgage lending rules, as many clients were abusing loans and were unable to repay them, which led to the eviction of debtors.

Buyers in the real estate market

When it comes to clients in the real estate market, Tbilisi is interesting for both locals and newcomers.

Diversity of real estate questions

Questions related to real estate purchases can be very diverse. People consider the possibility of buying a home both for personal use and for future resale. For example, if you decide to sell an apartment two years after purchasing it, this will help you avoid additional tax payments.

Goals of acquiring housing

Additionally, it is quite common to buy property with the intention of renting it out, which has become especially relevant given the growing interest from tourists in Tbilisi as a vacation destination.

Residence permit and tax residency

It is important to note that one of the key factors driving foreigners to purchase real estate in this city is the opportunity to obtain residency, as well as tax residency in Georgia.

Real estate prices in Tbilisi

As of today, the average price per square meter in Tbilisi is approximately $750. However, this figure can vary significantly depending on the location and characteristics of the specific property.

• In prestigious and central areas, the cost of one square meter can reach 2500 dollars.
• For especially exclusive properties, the price can exceed $4500.
• New residential complexes have their own price ranges; in well-located modern projects, the cost per square meter varies from $750 to $1500.

Problems in the secondary market

It's important to consider that in the secondary market of Tbilisi, you may encounter apartments and houses that are in quite poor condition. Common issues include electrical wiring that may be unsafe, and the water supply pipes are often old and rusty.

Moreover, such buildings, which have significant historical value, sometimes have inconvenient layouts, such as missing kitchens or bathrooms, making them less attractive to buyers. This is especially true for properties that belong to the old housing stock and pre-war constructions.

Emergency condition of residential buildings

Unfortunately, in Georgia, insufficient attention is paid to the issues of emergency housing conditions. Due to a lack of funds from the state budget for major repairs, many citizens are forced to live in houses without windows and with neglected entrances.

In some cases, you can notice temporary supports holding up the facades of buildings. Despite this, the low price of such properties often attracts potential buyers.

The growth of modern residential complexes

Recently, Tbilisi has seen active construction of modern residential complexes that can compete with offerings from the secondary market. In addition, commercial real estate is rapidly developing in the city center, which creates certain challenges in the process of obtaining permits for new residential buildings in the more central areas of the city.

As a result, potential buyers should carefully weigh all the pros and cons before making a decision to purchase real estate in this rapidly developing city.

Conclusion

In conclusion, it can be noted that the real estate market in Tbilisi is at a turning point, creating numerous opportunities for both local and foreign investors. The attraction of foreign capital and favorable business conditions contribute to the growing interest in purchasing housing, which, in turn, increases competition and improves the quality of offerings in the market. The trends observed in recent years confirm that Tbilisi is becoming a true magnet for those who value not only housing but also the accessibility of urban infrastructure, modern amenities, and lifestyle.

As the author of this article, I am pleased to see that in recent years there has been an influx of people choosing Tbilisi for living and business, which in turn enriches the cultural palette of the city. However, it is important to remember that the real estate market is subject to cycles, and even a slight overheating can affect the demand for apartments and prices. Nevertheless, I am confident that a passive decline in information will not significantly alter the overall positive trend in the market.

Trends and prospects

Clients are increasingly paying attention to the eco-friendliness and quality of housing, which optimizes construction and offers buyers a wider range of quality options. These changes mean that future projects are likely to include:

• Infrastructure optimization
• Providing housing that reflects modern trends and needs

Tbilisi undoubtedly has great potential. Investing in real estate in this city automatically becomes an investment in lifestyle, culture, and dynamics that attract more and more people. Thus, it can be confidently said that over the next 5-10 years, given stable positive economic factors, interest in the real estate market in Tbilisi will continue to grow, providing unique opportunities for both buyers and investors.