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Housing and cost analysis in Georgia

Home page » Blog, news, reviews about Georgia » Housing and cost analysis in Georgia
Author of the article:
Kirill
Real Estate Specialist
of Georgia
Date:  21.01.2024
Reading time: 14 min.
Views:  44

In recent years, Georgia has attracted more and more attention in the international arena as a country with great potential for real estate investment. Stable GDP growth, active tourism development and attractive housing prices make the Georgian real estate market interesting for foreign investors. In this article, we will conduct a detailed analysis of the housing market and cost in Georgia, consider the main regions of development, market segmentation and current statistics. We will also discuss the specifics of the construction market, new opportunities for investors and pitfalls of investing in Georgia.

General characteristics of the real estate market in Georgia

The Georgian real estate market is showing steady growth, which makes it attractive for investors from all over the world. This growth is driven by several key factors.

First, the country's GDP growth indicates the development of the economy and an increase in the purchasing power of the population. This, in turn, contributes to an increase in demand for real estate and an increase in prices for it.

Secondly, the active development of tourism in Georgia creates a high demand for resort real estate and hotel business. Many foreign investors see this as a great opportunity to invest their funds and get a stable income.

Third, Georgia attracts investors with its unique culture, magnificent natural landscapes and the hospitality of the local population. These factors create a favorable atmosphere for living and working, which also stimulates the demand for real estate.

Наконец, привлекательные цены на real estate in Georgia делают этот рынок доступным для инвесторов с различным бюджетом. Более того, в Грузии существуют перспективы долгосрочного роста стоимости недвижимости, что делает инвестиции в этом направлении еще более привлекательными.

Thus, the Georgian real estate market is a promising area for investment, which can bring good returns in the long term.

GDP and tourism growth in the country

In recent years, Georgia has demonstrated stable GDP growth. According to the World Bank, the country's GDP increased from $ 15.16 billion in 2010 to $ 17.47 billion in 2019. This indicates a stable development of the country's economy and an increase in the purchasing power of the population.

Tourism is one of the main drivers of Georgia's economic growth. According to the National Statistical Office of Georgia, the number of tourists visiting the country increases every year. If in 2010 the country was visited by 2.8 million tourists, in 2019 this figure reached 9.4 million people. This is more than 3 times the population of Georgia itself.

The growth of tourism has a positive impact on the development of the real estate market. In particular, the demand for resort real estate and hotel business is increasing. According to the Georgian National Tourism Administrative Center, revenues from international tourism in 2019 amounted to $ 3.3 billion, which is 1.4% more than in 2018.

Thus, stable GDP growth and active tourism development make Georgia an attractive country for real estate investment.

Main market development regions

The most active development of the Georgian real estate market is taking place in Tbilisi and Batumi. These cities are the key regions that attract the most investment in real estate.

Tbilisi-the capital and largest city of Georgia, is the business center of the country. The city has more than 1.5 million inhabitants. Tbilisi attracts investors with its rich history, unique architecture and developed infrastructure. The city is actively developing various sectors of the economy, including IT, tourism and services. The main offices of the country's largest companies are located in Tbilisi, which creates a high demand for office and residential real estate.

Batumi — the main seaside resort of the country, attracts many tourists with its beaches, casinos and unique architecture. The city is located on the Black Sea coast and is one of the most visited tourist destinations in Georgia. Infrastructure is actively developing in Batumi, new hotels, restaurants and entertainment centers are being built. This creates a high demand for resort and hotel non-mobility, which drives up prices and attracts investors.

Apart from Tbilisi and Batumi, the real estate market is also actively developing in such cities as Kutaisi, Borjomi, Gudauri and others. These regions attract tourists with their natural attractions, resorts and historical monuments.

Kutaisi is the second largest city in Georgia, known for its historical monuments and proximity to various natural attractions. The city is actively developing tourism, which contributes to the growth of demand for real estate.

Borjomi is a famous resort town that attracts tourists with its mineral springs and beautiful landscapes. The city is actively developing a sanatorium and resort complex, which creates a demand for hotel real estate.

Gudauri is a popular ski resort that attracts tourists with its excellent conditions for winter holidays. New hotels and cottages are being actively built in the region, which makes it attractive for real estate investment.

Market segmentation by property type

The Georgian real estate market can be segmented by property type into residential, commercial and premium properties. Each of these segments has its own characteristics and development trends.

Residential properties — this is the largest and most actively developing segment of the market. The average cost per square meter in new buildings in Tbilisi is about 900-1000 dollars, in Batumi-about 700-800 dollars. However, prices may vary significantly depending on the city area, building number of storeys, availability of infrastructure, and other factors.

Commercial real estate In Georgia, it is also in demand, especially in large cities and tourist areas. The cost of commercial real estate in Tbilisi starts from $ 1,000 per square meter, in Batumi-from $ 800. The main buyers of commercial real estate are businessmen and investors who plan to open their own business or rent out premises.

Premium Real estate In Georgia — this is a separate segment of the market, which includes luxury apartments, villas and hotels in the best areas of the country. Premium property prices start at $ 2,000 per square meter and can reach several tens of thousands of dollars per square meter, depending on location, area, comfort level, and other factors.

Premium real estate in Georgia is in demand among wealthy Georgians and foreign investors who are looking for high-quality housing or investment properties. This market segment is characterized by a high level of service, unique design and location in prestigious areas of cities or near popular tourist areas.

Thus, the Georgian real estate market offers a wide range of investment properties, from affordable housing to premium real estate. Each investor can find a suitable option for themselves, depending on their financial capabilities, goals and preferences.

Comparison of the secondary and new building markets

The secondary real estate market and the new construction market in Georgia have their own characteristics and attract different categories of buyers and investors.

Secondary real estate Georgia often attracts buyers with its history, architecture and location. Many old buildings in Georgia have a unique architectural style and are located in the historical districts of cities, which makes them attractive to buyers. The average price of secondary real estate in Tbilisi is about 800-900 dollars per square meter, in Batumi-about 600-700 dollars.

New buildingsIn turn, they attract buyers with their modern layouts, quality of construction and infrastructure. New residential complexes are usually equipped with everything necessary for a comfortable life: modern security systems, parking lots, playgrounds, sports halls, etc. The average price of new buildings in Tbilisi is about 1000-1100 dollars per square meter, in Batumi-about 800-900 dollars.

Thus, the choice between secondary real estate and new buildings in Georgia depends on the preferences and goals of the buyer or investor. If you value history, unique architecture and want to live in the historical center of the city, then you should pay attention to secondary real estate. If modern layouts, quality of construction and availability of infrastructure are important to you, then you will most likely prefer new buildings.

In any case, both secondary real estate and new buildings in Georgia offer ample opportunities for housing and investment. The main thing is to carefully study the market, take into account all the factors and make the right choice.

Factors affecting prices

Real estate prices in Georgia depend on many factors, including location, area, quality of construction, infrastructure, and even the view from the window. It is important to consider all these factors when choosing an investment property.

Location — one of the key factors affecting the value of real estate. Properties located in central areas of cities, near tourist areas, or on the seashore usually cost more.

Square — another important factor. The larger the area of an object, the higher its cost. However, the cost per square meter may decrease as the total area of the object increases.

Construction quality it also affects the price. New buildings with modern construction materials and technologies, high-quality finishes and good sound insulation usually cost more.

Infrastructure — an important factor for a comfortable life. The presence of nearby shops, schools, kindergartens, hospitals, parks and other infrastructure can significantly increase the value of real estate.

View from the window — it can be a significant factor, especially for resort properties. Apartments and houses with views of the sea, mountains or historical sites usually cost more.

Thus, when choosing a property for investment, it is important to consider all these factors in order to make the right choice and get the maximum return on your investment.

New opportunities for investors

The Georgian real estate market opens up new opportunities for investors. Investing in hotel rooms from global hotel chains, this is a relatively new trend in the Georgian real estate market, which has already established itself as a highly profitable and reliable investment method. The investor buys a hotel room and receives income from its rental. At the same time, room management and guest service are entirely the responsibility of the hotel chain. This allows the investor to avoid many problems associated with the operation of real estate, and focus on generating income.

Residential real estate. Residential real estate in Georgia continues to be in demand both among the local population and among foreign investors. New residential complexes, apartments, cottages and villas in the country's resort areas offer a wide range of investment options.

Land plots. Land in Georgia is also of great interest to investors. Land plots for construction, agricultural land, vineyards-all this can be purchased for further use or sale.

It is important to note that when choosing a property for investment, it is important to conduct a thorough analysis and take into account all possible risks. This can be done by professionals — realtors, lawyers, real estate consultants who have the necessary knowledge and experience in the Georgian real estate market.

Thus, the Georgian real estate market offers investors a wide range of opportunities to invest money and get a stable and high income.

Pitfalls of investing

Despite all the advantages, investing in real estate in Georgia has its own risks. It is important to consider these risks and be prepared for them in order to make a successful and profitable investment. Let's take a closer look at some of these risks.

Market unpredictability. Real estate prices can either rise or fall, depending on a variety of factors, including the economic situation in the country and the world, changes in legislation, supply and demand in the market, and much more. An investor should carefully study the market and monitor its changes in order to make the right investment decisions.

Problems when buying, selling, or renting real estate. Investors may face various challenges related to buying, selling, or renting real estate. These can be legal problems, problems with documents, unscrupulous sellers or tenants, problems with the maintenance of real estate, and much more. To solve these problems, an investor may need the help of professionals — lawyers, realtors, and management companies.

Stereotypes about Georgia as a cheap country. Some investors may be discouraged by stereotypes about Georgia as a country with a low standard of living and cheap real estate. However, this is not true. Georgia is a country with a high level of hospitality, developed infrastructure and quality real estate. In addition, the country is actively developing and modernizing, which creates additional opportunities for investors.

Risks associated with the political situation. As in any other country, there are risks associated with the political situation in Georgia. Political instability can lead to economic fluctuations, changes in legislation, security problems, and other negative consequences for investors. Therefore, before investing in real estate in Georgia, it is important to carefully study the political situation in the country and take into account possible risks.

In conclusion, while investing in real estate in Georgia has its own risks, it also offers many opportunities to earn a high and stable income. The main thing is to properly assess all risks and opportunities, be prepared for possible problems and be ready for long-term investments.

Recommendations for successful investments

For a successful investment in real estate in Georgia, it is important to take into account a number of factors and follow some recommendations. Here are some of them::

Conduct a thorough market analysis. Before investing in real estate, it is important to carefully study the market, learn about current prices, trends, supply and demand. This will help you make the right choice and avoid unpleasant surprises.

Study the peculiarities of the construction market. The quality of construction, the materials used, the reliability of the developer — all this is important to take into account when choosing an object for investment. Do not rush and invest in the first object that comes to hand. It is better to spend a little more time studying the market and choose the most reliable and promising object.

Take into account all risks and difficulties. As mentioned above, investing in real estate in Georgia has its own risks. It is important to take them into account and be prepared for possible difficulties. This will help you avoid unpleasant surprises and make your investment safer and more profitable.

Contact professionals. If you are not sure of your abilities or do not want to spend time studying the market, it is better to contact professionals. These can be realtors, lawyers, or real estate consultants. They will help you make the right choice, avoid mistakes, and save time.

Be prepared for long-term investments. Real estate investments are usually long-term investments. Don't expect a quick profit. It is important to be prepared for the fact that the return on investment may take several years.

Following these recommendations, you will be able to make successful and profitable investments in real estate in Georgia.

Conclusion

In conclusion, we can say that the Georgian real estate market is an attractive investment destination. The country has a great tourist potential, is actively developing and attracts more and more foreign investors. However, like any other investment direction, investing in real estate in Georgia requires careful analysis and understanding of the market.

If you are interested in investing in real estate in Georgia and are looking for professional assistance, please contact us. Our company has extensive experience in the Georgian real estate market and is ready to offer you a full range of services, ranging from consulting and ending with the selection and purchase of real estate.

Frequently Asked Questions

The real estate market in Georgia is attractive due to stable GDP growth, active development of tourism and affordable housing prices. These factors create good prospects for investment in real estate.

In recent years, Georgia's GDP has increased from $ 15.16 billion in 2010 to $ 17.47 billion in 2019. Tourism is also growing, with the number of tourists increasing from 2.8 million in 2010 to 9.4 million in 2019.

The largest development of the real estate market is observed in Tbilisi and Batumi. Tbilisi, the capital of Georgia, attracts investment due to its rich history and developed infrastructure. Batumi, the main seaside resort, attracts tourists and investors with its beaches and casinos. In addition, the development of the market is also observed in other cities, such as Kutaisi, Borjomi and Gudauri.

Real estate prices in Georgia depend on a number of factors, including GDP growth, market demand, availability of resorts and infrastructure. Economic development and tourism also have an impact on prices.

The real estate market in Georgia is divided into several segments, including residential, commercial and resort properties. In recent years, resort real estate and hotel businesses have become particularly popular among investors.

New opportunities for investors include investments in resort real estate, hotel business, as well as participation in the development of infrastructure and residential complexes.

Pitfalls may include legal aspects, currency risks, and market competition. It is important to conduct thorough research and get professional advice before investing.

Recommendations include market research, working with reliable real estate agents, risk assessment, and long-term planning.

Why is the real estate market in Georgia attractive for investors?

The real estate market in Georgia is attractive due to stable GDP growth, active development of tourism and affordable housing prices. These factors create good prospects for investment in real estate.

What is the growth of GDP and tourism in Georgia?

In recent years, Georgia's GDP has increased from $ 15.16 billion in 2010 to $ 17.47 billion in 2019. Tourism is also growing, with the number of tourists increasing from 2.8 million in 2010 to 9.4 million in 2019.

Which regions of Georgia are experiencing the greatest development of the real estate market?

The largest development of the real estate market is observed in Tbilisi and Batumi. Tbilisi, the capital of Georgia, attracts investment due to its rich history and developed infrastructure. Batumi, the main seaside resort, attracts tourists and investors with its beaches and casinos. In addition, the development of the market is also observed in other cities, such as Kutaisi, Borjomi and Gudauri.

What factors influence real estate prices in Georgia?

Real estate prices in Georgia depend on a number of factors, including GDP growth, market demand, availability of resorts and infrastructure. Economic development and tourism also have an impact on prices.

What segments of real estate prevail in the market?

The real estate market in Georgia is divided into several segments, including residential, commercial and resort properties. In recent years, resort real estate and hotel businesses have become particularly popular among investors.

What new opportunities are available for investors in Georgia?

New opportunities for investors include investments in resort real estate, hotel business, as well as participation in the development of infrastructure and residential complexes.

What pitfalls should you consider when investing in real estate in Georgia?

Pitfalls may include legal aspects, currency risks, and market competition. It is important to conduct thorough research and get professional advice before investing.

What recommendations can be given to potential investors for successful real estate investments in Georgia?

Recommendations include market research, working with reliable real estate agents, risk assessment, and long-term planning.

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