14.Sep .2020 16:14

TBC Research: SALES DOWN IN ALL DISTRICTS, GLDANI AND SAMGORI DISPLAYED MORE RESILIENCE

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Sales are down in all districts as of 8M 2020, with the sharpest declines of sold units observed in Chughureti (-47% YoY), Saburtalo (-44% YoY), and Krtsanisi (-41% YoY).

Notably, as of 7M 2020, the construction area was up in the majority of districts, except Didi Dighomi (-22% YoY), Samgori (-29% YoY) and Vake (-48% YoY).

After the sharp drop due to the COVID-19 pandemic in April and May, dynamics of residential real estate transactions has considerably picked up, underpinned by reopening of the economy by the end of May and activation of the government development stimulus program in the beginning of July.

• Notably, July and August of 2020 still had higher number of transactions compared to the same period of 2016 and 2017, but lower than 2018 and 2019.

• In 8M 2020, Tbilisi residential market featured circa 16,000 transactions, encompassing a total of circa 1.1mln Sqm area, down by -35% and -34% YoY, respectively.

• Circa 9,900 units, encompassing 682,000 Sqm area sold in 2020 were new apartments, while circa 6,200 units, encompassing 415,000 Sqm area sold in 2020 were old apartments.

• New apartments account for the larger share of transactions in Tbilisi. The proportion started to marginally decline post May, but reversed in August, up to 65% (+4pp), on the back of the subsidy program.

• In August 2020, 2,387 residential property sales transactions (-17.4% YoY) with a total of 158,307 Sqm area (-19.3% YoY) were registered in Tbilisi. The transaction growth rate of old apartments decreased in August to -25% YoY, down from -11% in July, whereas the growth rate for new apartments rose to -12% in August, up from -22% in July.

Sales are down in all districts as of 8M 2020, with the sharpest declines of sold units observed in Chughureti (-47% YoY), Saburtalo (-44% YoY), and Krtsanisi (-41% YoY).

• Gldani and Samgori were relatively resilient. In these districts, number of transactions decreased by 21% YoY and by 24% YoY, respectively.

• In absolute, Saburtalo and Didi Dighomi still lead the sales. Together, the two districts account for over third of residential space sold in Tbilisi.

• Chughureti, Mtatsminda and Krtsanisi are the least active districts, with 24 thousand, 29 thousand and 31 thousand Sqm residential area sold in 2020 8M, respectively.

• Homebuyers of Tbilisi residential market mostly go for small and medium-size apartments. In August, purchased residential space averaged at 66 Sqm in the capital.

• Homebuyers purchased smaller apartments in the suburban districts as opposed to the central ones, where demand leaned more towards larger units. In Jul-Aug period, new properties with larger than 100 Sqm area accounted for 36% of sales in Vake and 29% in Mtatsminda.