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Apartment sales patterns slightly change in 3Q2020 in Georgia

Business Materials 2 November 2020 17:11 (UTC +04:00)
Apartment sales patterns slightly change in 3Q2020 in Georgia

BAKU, Azerbaijan, November 2

By Tamilla Mammadova – Trend:

Apartment sales patterns slightly changed in 3Q2020, with decreased demand on premium segment in Georgia, Trend reports via the Georgian Galt & Taggart investment company.

In the new apartment segment, medium-sized apartment (51-80 m2) sales were most prevalent – 52 percent of total sales in 3Q2020 up from 48 percent in 3Q2019 – effect of subsidy scheme limits.

In the old apartment segment, small-sized apartment (18-50 m2) sales were most prevalent. Importantly, demand for large-sized apartments (81-150 m2) diminishing.

The low-price segment was most demanded – evidence that low-to-middle-income households drive demand for the housing market. Some 55 percent of the total number of apartments sold were in the low-price segment (54 percent in 3Q2019), while the premium segment accounted for only 8 percent of the total in 2Q2020 (13 percent in 3Q2019).

Demand was high for medium-sized apartments (51-80 m2) in all districts of Tbilisi, except central districts (Mtatsminda and Vake), where large-sized flats dominated the sales.

"Decline of rental rates can be explained by nonexistent tourism and reduced demand from students because of online learning at universities. Therefore, rental yields are on the decline – rental yield was down to a record low 7.7 percent in 3Q2020 from 8.9 percent in 3Q2019. We expect gradual growth in rental yields, as tourists will return and the economy rebounds. We expect apartment sales to moderate in 4Q2020, from September 2020 highs, as rising COVID cases and lari depreciation may weigh on the house buying decision," the company said.

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