Real Estate & Construction

Real estate is one of the fastest growing sectors of the Georgian economy. Given its size, urban form and geopolitical position, we expect further development of the real estate market in Tbilisi. The appearance of many construction and development companies met the high demand for residential and commercial space. Today, Georgian developers offer a wide variety of newly-built apartments ranging from the so-called cheap apartments to luxurious multifunctional condominiums. Demand considerably exceeds existing supply and the real estate market offers development opportunities across virtually all sectors - offices, shopping-malls, retail warehousing and logistics.

RESIDENTIAL MARKET

The residential market in Georgia is developing quickly, with high construction activity and growing prices. The absence of efficient saving mechanisms has led individuals to buy flats as an investment in a highly speculative market. Advance payment schemes are popular in Tbilisi’s demand-driven residential market with the most common mode of payment being the mortgage loan at the rate of 14%.

OFFICES & RETAIL

Lack of high calls office space makes it difficult to find a suitable business location in Tbilisi and other cities. Most companies opt to rent or buy apartments for their businesses or to rent offices in reconstructed residential buildings that today serve as shelters for various companies and organizations. Several large business centres are set to appear in Tbilisi in the near future and almost all new residential complexes include space for businesses.

HOSPITALITY SECTOR

Demand for high quality hotels in Georgia remains unsatisfied. Thousands of apartments are leased as hotel rooms daily. High class stock is extremely limited and existing hotels operate with nearly full occupancy during the week while charging healthy rates. Growing tourism and business activity promises a strong future in the hotel market/ hospitality sector.

The recent boom in demand for residential and commercial space has made the construction sector one of the highest escalating sectors of the economy. The purchasing power of customers is fueled by the growing availability of mortgage financing, creating a much larger market than ever before. However, associated real estate services have not grown correspondingly, the real estate broker market features a large number of small agencies, many of which provide identical listings.

Impact of government reforms. Government's Liberalization Program assigns special importance to streamlining and liberalizing the regulatory environment affecting the construction business.

Licensing and inspection system. Significant reforms have been carried out in recent years to simplify the system of issuing permits in the construction sector. As a result, procedures are simplified; a "one-stop-shop" principle is responsible for issuing permits, and a statutory time limit has been opposed, after which silence is taken as consent.
Standardization and technical regulation. According to the implemented reforms, construction businesses can now use the technical regulations of OECD and EU member countries acknowledged by the Government of Georgia. At the same time, they can voluntarily choose other internationally recognized standards for their construction projects.

The continuing process of simplifying the procurement of permission for building from city authorities and land purchases support real estate development.

Real Estate Dashboard/ Tbilisi

- TIME FOR BUSINESS IN TBILISI - Real Estate Market Overview

- Energy Efficient Construction Materials

Wide scale reforms were quickly implemented in Georgia, the investments have doubled over the last three years.

Jean Lemierre

President of the European Bank for Reconstruction and Development