TBC Capital’s research on the residential real estate sector includes a complete analysis of 2018.
Preparation of research was henced by the growing demand of the market participant developers, to receive relevant, reliable and competent information about the sector. Consequently, the research aims to show companies and potential investors the current situation of the market and the potential for development of the sector.
According to the research, the volume of Tbilisi residential real estate market was 4.1 billion GEL, in which 65% of the newly constructed apartments were driven by transactions. The real estate of the apartments increased by 31%, with the availability of mortgage loans along the lines of the regulatory regulations announced by the National Bank. And after regulatory action, the number of mortgage loans approved in January 2019 decreased by 47% compared to the same period of the previous year.
In 2018, the increased demand for premium and a medium segment was fixed. The major part of realization in the central areas is due to the demand for large apartment flats, and sales of relatively smaller apartments in the suburbs prevails.
At the same time, on the background of new construction regulations, permits issued for residential real estate in Tbilisi have decreased by 45% compared to the previous year. With the calculation of TBC Capital, decrease of permits will be reflected in the completion of the construction of 2021.
The fundamental criteria characteristic of the sector looks healthy, which now excludes the threat of “overheating” of the sector. The average price for transactions in 2018 is increased by 6% compared with the previous year and in 5% in USD. Mtatsminda has the most expensive district status.
Compared to similar cities, prices in Tbilisi are cheaper than in the suburbs and in the center of the city that indicates future growth. In the longer term, TBC Capital predicts slow and steady growth of residential real estate prices, maintaining a moderate balance in the near future.
TBC Capital is the subsidiary and licensed brokerage company of TBC Bank offering investment banking services. Since 2017 TBC Capital has become part of TBC Bank’s corporate and investment banking business. The main business decisions of the company are financial consultations and credit, rating services, issuance of bonds and shares, investment research and brokerage activities.