Housing prices in Georgia have risen faster than consumer inflation, a development worth monitoring but not yet signaling a critical market situation, economist Otar Nadaraia said on the Real Estate Prospect program.
Nadaraia noted that the market has been supported by increased demand, lari appreciation and migration linked to the war in Ukraine. He estimated that migrants occupy around 40,000 apartments in Tbilisi. An end to the war or an outflow of migrants could put significant pressure on prices, particularly as construction activity and housing supply have expanded sharply.
The sector’s high profitability has also attracted capital from other industries, increasing exposure to potential market fluctuations. Nadaraia warned that real estate is cyclical and that excessive borrowing in foreign currencies could create substantial financial risks for market participants.
He said the current situation does not show the same warning signals seen during Georgia’s 2005–2008 property boom or Greece’s property market crisis, but external developments and currency risks warrant close attention.
