In July 2024, demand for real estate improved, but still remained sluggish compared to 4M24. As a result of weakened demand, price growth decelerated - Jul-24 was the first month when prices remained completely flat m/m, since the beginning of 2022. Sluggish demand also affected supply - in the June-July period, permit issuance decreased drastically by 58.2% y/y and 40.3% y/y, respectively. Permit issuance dynamics are likely to be maintained by end of 2024 as developers await until demand improves considerably.
In Jul-24, the number of sold apartments in Tbilisi stood at 3,476 units, slightly down 1.3% y/y, but up 17.6% m/m. The monthly growth is largely due to a one-off effect from the late registration of already sold apartments in several projects.
Cumulatively, in 7M24, 22,353 apartments were sold in Tbilisi, reflecting a 3.2% y/y decrease. Notably, apartment sales were down on the secondary market (-3.7% y/y) and slightly up on the primary market (+1.1 y/y).
Other noteworthy features of the market remained unchanged, such as the dominance of medium-sized apartments (51-80 m2 ), due to affordability and the ease of renting, and falling share of sold apartments in the budget segment.
In Jul-24, the total market value of apartments sold in Tbilisi stood at US$ 270.4mn, up by 5.5% y/y and 18.4% m/m. Cumulatively in 7M24, Tbilisi real estate market size was up by 1.9% y/y to US$ 1,708.5mn.
Price for renting an average apartment (50-60 m2 ) in Tbilisi decreased slightly by 0.9% m/m to US$ 9.8 per m2 .
In Jul-24, a sharp reduction in construction permits continued, which started in Jun-24. A total of 20 permits were issued and the living area of these permits has declined by 40.3% y/y. We expect that developers will delay permit finalization process until the demand improves considerably.
