With interest rates set to stay lower for longer and bond yields in negative territory, equity investment interest for real estate is expected to remain plentiful for the remaining of 2021. That said, market participants are being more careful than ever about how and where they deploy that capital.
They are acutely aware that this real estate cycle is now more than a decade old and prices in many countries and sectors are at record highs. As for the sectors into which capital is flowing, residential once again dominates the upper echelons of investment rankings. In this overall environment Georgia is attracting more and more investors, looking at its housing and hospitality markets that are showing upward trends of price increase.
According to Mr. Amr Alabwaz the CEO of York Towers, an international real estate developer that has built a reputation for excellence via a portfolio of up to 20 projects across three continents, the residential market in Georgia market is reviving at a fair rate, with transaction volume stabilizing.
As Mr. Amr puts it, the number of residential properties sold in august was around 3100 units, which is higher than the level recorded in 2019 (+9%). Between January through August (8M), the number of transactions increased by 1% over the same period in 2019. Prices are increasing as a result of a moderately recovered market and demand. In August 2021, the average residential real estate price was about 5% higher than in 2019.
Government-subsidized mortgage rates and a surge in work-from-home opportunities contributed to the bursting of the inflated housing market. Households who desired more spacious homes in suburban areas with city lifestyle perks overwhelmed the housing marketing with home mortgage applications.
The year of the pandemic has further sharpened attention on healthier living, boosting green efforts with greater popular support than before. With this in mind, developers offer more eco-conscious options to the end-users and the latter are more demanding in striving for sustainability.
Consequently, as Mr. Amr states that demand for residential lands in Tbilisi and its surroundings has been growing. The analysis of residential land transactions in Tbilisi’s surroundings shows 822 units having sold in the first half of 2021 that is 56% higher in comparison with the same period in 2019.
This has been taken into account by York Towers, the largest exporter of Georgian Real Estate to the GCC countries. “York Tower's proposal is based on a proprietary research platform that identifies the needs and desires of its target demographic, which ranges from millennials to discerning high-net-worth individuals. But apart from this we are placemakers. Our mission is to create soulful places that enrich people's lives,” says the CEO of the company Amr Alabwaz.