The FINANCIAL –On 27th March the Ballroom of the Sheraton hosted the grand presentation of the real estate research conducted by TBC Capital, daughter brokerage company of the well-established Georgian financial intermediary TBC Bank.
The rising demand from development companies created the necessity for creating a reliable and relevant information source, that would outline the current state of the real estate market and would highlight the leading tendencies.
“We believe that real estate is one of the leading industries that is positively contributing to the Georgian economy, the event gathers current and potential partners in the real estate business, with whom we would gladly share our findings.
2018 has been a very exciting year, and 2019 has also had a very promising start. We hope that our vision alongside the market predictions will be a great help to our partners.
I would say that the most important details that our research has spotted are the market stability and potential for long run growth,” Vakhtang Butskhrikidze, the CEO of TBC Bank, stated in an interview with The FINANCIAL.
The research does indeed reveal some very helpful statistics.
65% of transactions in real estate are for newly-built houses. Average demand for real estate surface area has increased by 31%, which the research claims is directly caused by the ease of accessibility to mortgage loans, as well as newly announced regulations by The National Bank.
With the above-mentioned real-estate regulatory law taken into action, statistics of January 2019 show a dramatic decrease in mortgage loans of 47%.
The year 2018 showed an increase in demand for premium and average houses. In the city centre a significant portion of demand was for houses with a large surface area, whereas demand in the outskirts was dominated by relatively smaller houses.
“The research process involved a very challenging collaboration with the mayor’s office, the scale at which our statistics were provided is a shining example of that.
I would also like to mention the undeniable increase in consumer purchase power, which is expected to have a very positive effect on both real estate and the banking sector,” stated Giorgi Tkhelidze, Deputy CEO of TBC Bank.
As the mayor’s office continues to keep their word on taking care of the infrastructure of Tbilisi, construction permits are becoming harder to gain, reflected in a 45% decrease compared to the previous year.
According to the calculations of TBC Capital, the decrease in construction permits will have its effect in 2021.
With the constant evaluation of the real estate market, TBC Capital is fairly confident about stating that there are little to no signs which might indicate a bursting of the real estate bubble.
2018 has shown a 6% increase in transaction prices in GEL, and 5% in USD.
As for the status of the most expensive districts in terms of real estate, Mtatsminda remains in the number one spot.
Tbilisi happens to offer relatively lower prices (both in its central districts and outskirts) for real estate compared to other cities with a similar status, which leads experts to forecast a rise in prices.
As TBC Capital claims, the long run real estate market analysis points at significant growth, while the short run analysis suggests somewhat balanced prices.
Since 2017, TBC Capital has become a very important part of the business and corporate doings of TBC Bank.
The daughter company specializes in: financial consulting; creditory service; emission of bonds and stocks; investing; research and brokerage doings.
By Gela Megeneishvili