As per Sakstat data, the construction cost index in August 2024 increased by 1.1% compared to the previous month. The change was mainly caused by a 1.0% increase in the prices of construction materials. Compared to the same period of last year, the construction cost index rose by 7.9%. The increase was mostly driven by the 29.7% increase in the average monthly nominal salary of the employees hired in the construction sector and the 3.8% increase in the cost of construction materials.
"Commersant" was interested in how the increase in the construction cost index will impact the local property market. We addressed the question to the CEO at the development company "Arci". Beso Ortoidze states that the increase in the construction cost index was recorded last year and price changes are not expected until the end of 2024.
"The main increase was recorded last year. This year, insignificant changes are observed, we can say that both construction materials and wages have stabilized. Therefore, the current prices in the real estate market will not change until the year end. We can expect a relative increase from next year driven by several factors- elections, a lot of global challenges," Beso Ortoidze says.
A relatively large increase in real estate prices was recorded in 2022-2023. In Beso Ortoidze’s words, it was caused by the pandemic, price hikes for construction materials and wages increase. In 2025, the real estate price may rise by 7-10% next year.
It is the pre-election period in the country. Political events affect almost the entire country. However, CEO at "Arci" notes that there is demand on the housing market despite the upcoming elections.
"During the elections, not only real estate, but also the country’s economy are put on pause, but no such signs are seen yet. October has started and strong demand is observed in the market," Beso Ortoidze points out.
The average price of real estate in the capital ranges within $ 1,200-1,300. In suburbs, the price is relatively low and makes $1,000. Middle-class housing can be purchased for about $1,500, the cost of premium class apartments reaches $ 2,000.
