(Tbilisi, Georgia) As it was noted in our last quarter commentary, the year 2010 showed significant increase in demand for all kinds of property categories. Compared to the year 2009, the market activity improved by 16% with sales of flats rising by 6%, under construction flats by 30%, non-residential by 78% and properties with land parcels by 20%.
As expected, after a positive performance in October, November, and December, the sales in January lost 35% which was due to January being an inactive month because of winter holidays, mainly New year and Christmas celebrations. The most decrease in demand was evident for under construction flats that slumped by 55%. Though the demand fell on all properties relative to the previous month, compared to January last year, the market activity is up by 19% which translated in the increase of sales of flats by 14%, non-residential by 15% and properties involving land parcels by 37%. The only category that performed poorer than in January last year is the under construction flats sales that showed 10% loss in demand.
The turnover of sales in USD almost halved in January compared to December, decreasing by 52% to 47 million USD. However, compared to January last year, the total turnover of sales is 26% higher which indicates that the market activity has recovered.
Activity by type of property.- Below is the comparison of the demand for flats, non-residential and properties with land parcels in January 2011 versus January 2010. As indicated, in January 2011 all property categories gained sales.
The sales of under construction flats decreased by 55% in January. Compared to the year 2010, the total number of sales of under construction flats in 2011 is 10% lower.
Based on the statistics, average 32 under construction flats are sold in Vake district per month, 22 in Saburtalo, 13 in Didube and 10 in Mtatsminda districts. Please note that sales in the construction developments that are not LLC are not registered in the public registry as under construction therefore given information is only for the LLC developments.
In January, the districts that commanded highest number of sales for completed flats were as follows: Samgori (117), Gldani (122) and Vake (115),and Saburtalo (112). Based on the statistics, average 160 flats are sold in Samgori district, 152 in Gldani District, 139 in Vake and 137 in Saburtalo districts each month.
Total turnover of sales in January represented 47 million USD. Comparing to January 2010, the turnover has increased by 26%.
Insight,- In conclusion, considering that January is generally a slow month due to holidays, the decrease in demand gives no reason to worry. As it was demonstrated by the statistics above, the real estate market activity is undoubtedly improving with higher demand recorded for almost all property categories. If the trend for the market activity in the past years stays consistent, then we should expect significant upward leap in demand in the months to follow.
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