The Georgian real estate market is facing a growing imbalance between supply and demand, according to investment bank Galt & Taggart. From 2023 to 2025, the number of construction permits issued significantly outpaced the number of apartments sold, with 60,000 units sold compared to more than 85,000 permits issued. This oversupply has intensified competition and slowed the growth of property prices.
Zuka Tavkelishvili, Associate Researcher at Galt & Taggart, noted that prior to 2022, the market maintained a healthy balance, with roughly one new construction started per apartment sold each year. However, in 2022 and subsequent years, the number of permits issued increased dramatically. In 2023 alone, 30,000 new apartment constructions were started while only 19,000 apartments were sold, creating a significant oversupply.
The oversupply has led to slower price growth and the simplification of internal installment schemes. Tavkelishvili explained that where down payments previously averaged 50-60%, they have now dropped to as low as 0% in some internal installment arrangements. This reflects heightened competition among developers and the exhaustion of incentives that were previously used to attract buyers.
Galt & Taggart recommends slowing down the issuance of new construction permits to restore balance between supply and demand. While banks are aware of the risks associated with excess supply, lending has not completely stopped, and careful regulation of new construction activity is seen as the primary solution to stabilize the market.
