The high interest of Russians and Ukrainians fleeing the war has sent home sales and rents in one of their beloved holiday spots – Tbilisi as well as Batumi through the roof, according to data and industry officials. The leading international developer – York Towers comment on both sales and rental markets, analyzing both the statistics as well as information from their extensive internal sales team. The company has offices in 7 countries, hence a comprehensive grasp of the current situation both locally and internationally.
According to Mr. Khaled Osama, the CEO of York Towers, facing uncertainty since Russia launched an invasion of its southern neighbor last month, some [Russians, Ukrainians, Belarusians] have extended holidays and stayed in hotels, while others opted for renting or real estate purchases. Resulting in Tbilisi being 75% booked in Mid-March on booking.com, as well as both rents and house prices skyrocketing in most of the popular neighborhoods in Tbilisi. Residential property sales in the city jumped nearly 15% year-over-year in February to 3,129 units. Average asking sale price also continued an upward trend in February with a 5.6% MoM and 9.9% YoY growth. The actual impact is expected to be seen once March figures are released as the invasion started on Feb. 24th. The National Agency of Public Registry has not yet provided information on the nationality of the buyers, however according to the company’s team of brokers demand has almost tripled from the countries above. Although York Towers has not concluded any deals with Russian citizens, we are aware about the facts when some immigrants are purchasing 10s of apartments, just transferring their money into real estate as currency is losing value every day. As Mr. Osama states another factor adding pressure to the housing market is the return of many Georgian migrants from Russia who have lost their jobs due to the sanctions. Some 200,000 people are estimated to have left Russia since the invasion of Ukraine, as the sanctions have caused many companies to close their doors and lay off employees.
As for any future projections, York Towers CEO states that despite the situation in Russia and Ukraine, for now, the company analysts are reticent about reshaping their forecasts for the year, while also acknowledging that the demand growth may be short-lived as a shock wave and the situation may soon go in regular mode.
“We're not dramatically changing any of our baseline forecasts for this year, but the distribution of what could happen has widened,” Osama says. “That's really where we are right now in this situation: The number of challenges, and that of opportunities at the same time, increased.”
