TBC Capital maintains its projections of the main market indicators. The key factors affecting the market positively are appreciation of GEL and historical high rental yield. However, it is worth noting that during Q1 2023, the residential area covered by issued construction permits increased by 71% YoY (see Annex). This could potentially indicate an oversupply of housing in the future. There is a possibility that market correction, projected to occur in the second half of 2023, may start earlier. TBC Capital will keep a close eye on the residential real estate market and will adjust projections in future publications accordingly.
In March 2023, a total of 633 new apartments were sold, marking a 17% decrease relative to the same period of the previous year. The decline was similar in MoM terms as well (-15%). Changes in old apartments sales (2,695 transactions) were much less notable, posting a 4% decline relative to March 2022 and improving in MoM terms by 2%. Therefore, the share of new units in all sales dropped to 19%.
Sale prices grew considerably for both new and old apartments, posting a 45% and 37% YoY growths, respectively. Moreover, in monthly terms, prices of new flats (+6.6%) increased significantly, while for old ones it remained relatively stable (+0.2%).
The majority of sales in March 2023 were for flats ranging from 50 to 75 SQM, accounting for 42% of total sales. Demand was also decent for apartments ranging from 35 to 50 SQM and less than 35 SQM. However, apartments larger than 125 SQM made up only about 6% of total sales. In the reporting month, shares of apartments priced at >1500 $/SQM and 900-1200 $/SQM showed considerable growth in total sales.
In March 2023, Saburtalo took the first place again as the district with the highest number of sold residential properties in Tbilisi. New apartment sales posted a YoY decline in the majority of districts, however Didube (+63%) and Isani (+37%) showed significant growths.
In case of old apartment sales, the highest YoY growths were recorded in Chughureti (+46%) and Krtsanisi (+44%). Positive YoY growths were also observed in Didi Dighomi (+9%), Saburtalo (+7%) and Gldani (+4%). The rest of districts posted a YoY decline in old apartment sales.
Mtatsminda and Vake continue to have the highest sale prices in Tbilisi. In March 2023, average price per SQM in Mtatsminda exceeded 1,800$. In the same period, there was a double digit annual growth recorded in almost all districts for both new and old apartments, while the decline was observed only for old apartments in Chughureti (-11%).