Kakha Samkurashvili, a senior analyst at Galt & Taggart, says that increase in the real estate is related to rising prices for construction materials, which have been intensified by the war in Ukraine.
"If we compare 1Q2019 to the first quarter of 2022, we will see that the average price per square meter has increased by 10%. Therefore, it can be said that the increased price of construction materials from 2019 was reflected in the price of real estate. According to Geostat, from the beginning of 2019 to the end of 2021, the construction cost index in USD increased by 13%. Price increase in the districts of Tbilisi was almost equal. I think the increase in the price of materials has led to an increase in the cost of construction, which has finally been reflected in the real estate market. We now have new data. Namely, the period before and after February. Prices have increased in 2021 too, now we have another price jump. Reinforced concrete is very expensive, which is the largest component in the formation of prices, which determines the price of real estate and the cost of construction in general," - said Samkurashvili.
According to him, there is an expectation that the price of construction materials, including fittings, will stabilize in the market, and if this happens, the impact on the value of real estate will be reduced.
"If it is not stabilized, it will have a clear impact on the real estate market, because consumers do not have the opportunity to buy expensive apartments with the same proportions," said Samkurashvili.
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