Tbilisi (GBC) - In 2024, demand in Tbilisi residential real estate market remained steady despite multiple headwinds, with a modest 1% y/y increase in total apartment sales. On the supply side, the total living area of construction permits decreased by 6.7% y/y after a record high 2023, though it still remained at elevated levels. The average price in USD on the primary market increased by 11.6% y/y in 2024, although the rate of price growth slowed compared to previous years. In 2025, we expect demand to soften due to domestic political instability - a projected slowdown in economic growth, GEL depreciation and potential reduction of rental yields are key factors in shaping the market's performance in 2025, we believe. 

Sales from developers

In the first four months of 2024, apartment sales from developers in Tbilisi remained stable. However, in May, sales dropped significantly (-42.0% vs Jan-Apr 2024 average) due to street protests and an abundance of holidays. In June, demand partially recovered but remained low, as many high-income buyers were abroad for Euro 2024. Sales fully rebounded in July, driven by the launch of several largescale projects that expanded buyer options. In October, preelection environment led to another slowdown, but sales picked up again in November due to pent-up demand. As expected, sales declined in December, though the drop was milder than anticipated, with a 9.0% y/y decrease. Overall, apartment sales in projects by our selected developers (see details on page 8) grew by 4.5% y/y in 2024.

Secondary market – registered transactions

In Dec-24, sales also decreased on the secondary market by 3.0% y/y. Smaller drop compared to the primary market suggests a shift in buyer preferences toward turn-key apartments, rather than ongoing construction projects, amid political uncertainty.

Overall, in 2024, the number of sold apartments on the secondary market (new and old projects combined) in Tbilisi stood at 20,207 units (-4.8% y/y). The decrease was driven by a 12.5% y/y drop in sales of old projects, while sales of new projects rose by 8.1% y/y.

Prices

In 2024, average price in USD per m2 on the primary market increased by 11.6% y/y, partly driven by rise in construction costs during the year. While prices remained high, the growth rate has stabilized compared to 2022-23, slowing from an average monthly increase of 1.5% to 0.5%.

Market size

In 2024, the total market value of apartments sold in Tbilisi stood at US$ 3,132.1mn, up by 7.1% y/y. 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.

Rent

During 2024 rent prices remained largely stable at around US$ 10 per m2 . The trend persisted in Dec-24 and price for renting an average apartment (50-60 m2 ) in Tbilisi stood at US$ 9.7 per m2 . This represents a 9.0% y/y decrease and 17.9% decline from the peak observed in Mar-23 (US$ 11.8 per m2 ).

Construction permits

In 2024, 255 construction permits were issued for residential projects, with total living area of 1.8mn m2 , 6.7% less than record high 2023, yet still elevated. Most of the permits were issued in Saburtalo (23% of total), followed by Didi Dighomi (18%) and Samgori (17%).