The Tbilisi real estate market saw an epic rise, and is now experiencing an epic fall. What happened?
“I’m looking for a tenant to replace me.”
“I’m moving to another country and I want to sublet my apartment.”
“We don’t want to lose the deposit.”
“We are helping our host to find a new tenant.”
These statements will probably look familiar if you spend any time in the Russian-speaking expat groups in Tbilisi.
What does it mean for the Tbilisi real estate market?
Since the beginning of the war in Ukraine, over 120,000 (officially…the unofficial number is about double that) migrants have crossed the Georgian border. That created an unprecedented demand for real estate in Georgia. Prices skyrocketed and continued to rise throughout 2022.
Today, the downward trend in the Tbilisi real estate sector is obvious. That big influx of migrants was temporary. Our team gets hundreds of inquiries every month and the inquiries are down about 40% compared to this time last year even though traffic to our website and social media profiles is at all-time highs.
You can see further evidence of the slowdown in the market by looking at all the high-priced apartments that are sitting on the market instead of being sold or rented. Where did all the buyers go? Where did all the tenants go?
The high-demand from the beginning of the war is gone and we are back to a more stable market. In fact, there are signs that the market will continue to slow down as all the temporary migrants move to long-term locations. If enough of them move, prices could end up LOWER than they were at the start of the Russia-Ukraine war.
The result is fewer requests and lower budgets.
People are moving to other countries, which is very common when they see the real estate prices in Tbilisi are higher than attractive options like Montenegro, Dubai, Spain or Portugal. If you can pay the same amount or even less to live on a beach or in a world-famous destination versus living in Georgia, would you choose Georgia?
The downward pressure on prices affects both rentals and sales. When there is less demand, sellers and landlords have to either lower their prices to attract people, or have their property sit on the market for months and months while the market continues to get weaker.
(Hint: The sign of an overpriced apartment is when you see the same place listed for a long time with a lot of different agents. If the price was good, the apartment would no longer be available. Buyers and renters aren’t stupid!)
How can you figure out the “real” price for an apartment in the current Tbilisi real estate environment?
You will not find this sort of information on ”myhome” or “ss” websites. Those prices are commonly referred to as imaginary prices. Any crazy landlord or seller can pick any price out they want and post their properties on the public advertising websites. The REAL prices are those when a buyer has purchased a property, or when a tenant has signed a lease, NOT what they are asking on a public advertising website. The advertised prices are often fantasies that have no basis in reality.
The final prices of real transactions are known only to those who participate in them (agent, buyer, seller, landlord and tenant). We have a good idea about true prices in many parts of Tbilisi because of our daily conversations. We can quickly tell by the number of requests we are getting if a property is desirable (price, location, renovations) or not.
The ONE thing that is true in every type of market is that high-quality properties that have realistic prices sell and rent very fast. Overpriced properties do not sell or rent very fast (or at all).
As always, feel free to contact us if you need help navigating the Tbilisi real estate market, or any other markets we serve.