BAKU, Azerbaijan, Nov.17
By Tamilla Mammadova – Trend:
In October 2020, 3,117 transactions were registered in Tbilisi, which is 5 percent lower than the previous year, Trend reports referring to the report of Canada-based Colliers International real estate services organization.
As for the market size, the figure stands at $139 million, reflecting a 4 percent decrease compared to the same period in 2019.
The number of transactions recorded on premium and medium new apartments is 38 percent and 26 percent less than the same period in 2019. As for the economy segment, the number of transactions has increased by 12 percent and amounted to 1,808.
The number of new apartment transactions is 20 percent lower than the same period in 2019, while the number of transactions registered on old flats has decreased by 26 percent and accounts for 7,079 units.
From January through October 2020, the market size of new flats is 24 percent less than the same period in 2019 and accounts for $666 million, while the figure for old flats is 27 percent lower and amounts to $281 million.
The weighted average selling price of new flats in the period of January-October 2020 is $674 per m2, reflecting a 5 percent decrease when compared to the same period in 2019. As for the old flats, the WAP accounts for $637 per m2, depicting an insignificant decrease of $2 per m2.
"We have divided the residential market into the following price segments: Economy, Medium, and Premium. We have further analyzed the base scenario with moderate isolation until the end of 2020. The prices of economy segment residential properties are not expected to change significantly, while the number of transactions in this category is forecast to drop. We expect the demand for economy class single-family houses to soar in the isolation period. The projections are negative for the medium segment residential market in terms of the number of transactions and prices. Speculative transactions are expected to increase in the medium market due to decreased prices. The number of transactions is expected to drop in the premium segment, but we anticipate very little price change in this category. The market of rental properties will be most affected, as both, prices and the number of transactions are expected to drop by the end of the year," the report said.
In the short-term, it is highly likely that the number of transactions will drop, especially in touristic areas such as Batumi, Bakuriani, and Gudauri. Some 11,500 transactions were recorded in Batumi in 2019, most of which were investment properties. Similarly, property transactions in Gudauri and Bakuriani have predominantly investment purposes.
"The market for investment / rental apartments will face challenges. Significant price reductions are expected for both rental and sale property. On the other hand, this reduction may inspire a new wave of speculative investors who are active during the crisis period," the report said.
---
Follow the author on Twitter: @Mila619793