02.Nov .2021 23:30

York Towers: Post-pandemic Picture of Residential Property Market

York Towers: Post-pandemic Picture of Residential Property Market
views 588
Back

The volume of residential real estate transactions is increasing in tandem with residential prices throughout the world. In the first half of 2021, commercial residential transactions for multifamily housing became the largest sector by investment volumes, accounting for 28% of all transactions. When the property markets recovered, so did consumer home buying. As Mr. Amr Al Abwaz, the CEO of York Towers, a major real estate development and construction company in the region, states “the strength of residential property markets shows that home isn’t just where the heart is.”
 
In the first half of 2021, global real estate investment experienced a major shift as the multifamily residential sector overtook offices to become the world's largest sector. Around $136 billion in residential sector investments were made in the first half of 2021, up 35% from the same time in 2020 and up 4.1 percent from office transaction volumes. The solid fundamentals of the residential sector fueled growth across the world. Furthermore, many areas still have a serious shortage of suitable housing, especially with the influx of young people leaving their hometowns for the city.

In the end-user residential market there were converging factors driving increased transaction volumes both in Georgia and globally, according to Mr. Al Abwaz. From the race for space to the shift to working from home, many buyers decided that their current homes weren’t working for them. As soon as they were able, buyers made the choice to move to new properties, assisted by record low interest rates thanks to the government subsidy programs for the mortgages. As a result, the first half (H1) of 2021, 16,383 transactions were registered in Tbilisi, that is 54% and 3% higher than the same period in 2020 and in 2019.

When asked about where the transactions are headed, Mr. Amr responds that given the record-low interest rates likely to remain, considering the subsidies offered both by the government and the developers, transaction volumes look to be supported in the near term. Over the medium term, as economies continue the process of returning to normal, Tbilisi as the centre of work and living will begin to draw more people who will need somewhere to live, in addition to this will be the returned demand from international buyers (mainly for rental investment purposes) thanks to the continued lessening of restrictions around travel will boost transaction volumes, driving the prices even further. As a result, according to York Towers, 2021 is the year to buy real estate in Georgia and sit on it while you earn rental income and have a high possibility of seeing your investment appreciate significantly.