G&T published a report on Tbilisi Residential Real Estate. According to the document, in June 2024, the dynamics improved and apartment sales increased by 17.7% compared to the previous month, when the decline was caused by the abundance of holidays and instability in the country. The improvement in sales in June is noteworthy, considering that a substantial portion of population with high disposable income was traveling abroad during EURO 2024 championship (June 18-30).
Despite this favourable trend, the number of apartments sold in June is significantly lower than the sales figures recorded in previous months (except for
May). Notably, in 1H24, Georgian citizens made up 76% of total sales, compared to 80% in 2023. Meanwhile, the share of Israeli citizens in sales increased significantly from 4% to 11%, while the share of Russian citizens decreased from 8% to 2%.
In Jun-24, the number of sold apartments in Tbilisi stood at 2,957 units, down 21.9% y/y and 7.5% m/m. Notably, sales have decreased in both the primary and
secondary markets. It is likely, that potential homebuyers remain hesitant to make purchases, seeking a more stable environment.
Cumulatively, in 1H24, 18,877 apartments were sold in Tbilisi, reflecting a 3.6% y/y decrease. This decline was solely driven by the secondary market (-7.1% y/y), while the primary market experienced a slight 0.6% y/y growth.
In Jun-24, increase in transactions was only recorded in Vashlijvari district, while sales decreased annually in every other district of Tbilisi. The largest portion of transactions on the primary market, accounting for 20.5% of total primary sales, was recorded in Didi Dighomi.
Other noteworthy features of the market remained unchanged, such as the dominance of medium-sized apartments (51-80 m2), due to affordability and the ease of renting, and falling share of sold apartments in the budget segment (<$1,000/m2 ), driven by rising prices.
In Jun-24, monthly price increase on the primary market was only 0.1%, which is the lowest increase in the last 30 months. The slowdown in the price growth
pace is slightly more noticeable in the premium segment projects. Should the demand remain weak, prices are anticipated to remain stable in the upcoming
months.
In Jun-24, the total market value of apartments sold in Tbilisi stood at US$ 228.4mn, down by 17.6% y/y, due to decreased sales during the month. Cumulatively in 1H24, Tbilisi real estate market size was up slightly by 1.2% y/y to US$ 1,438.1mn.
Price for renting an average apartment (50-60 m2 ) in Tbilisi remained flat (US$ 9.9 per m2). Notably, rents have a downward trajectory in suburbs, while in central districts they stay elevated.
In Jun-24, the living area of issued construction permits has declined to its lowest level in the past 18 months. This decline can be attributed to seasonality. If this trend persists, short-term decrease in supply will help balance the weakening demand.
