Demand for purchase of real estate decreases in Georgia

Finance Materials 20 July 2019 10:54 (UTC +04:00)

Baku, Azerbaijan, July 19

By Tamilla Mammadova – Trend

The demand for real estate purchase in the prestigious central districts of Tbilisi decreased by 23 percent, while the demand for rent increased by 49 percent, Trend reports with reference to site SS.ge, the largest portal of Georgia related to apartments, houses, lands and commercial real estate.

In May 2019, the demand for the purchase of apartments in two main central residential areas of Tbilisi decreased by 10 percent in average compared to May 2018. Compared to June 2018, an increase by 4 percent is observed in June of this year.

In particular, in May 2019, the demand for real estate in the Georgian city of Vake decreased by 17 percent, in Saburtalo by 18 percent, in Digomi by 5 percent, compared to May 2018.

In turn, in June 2019 , the demand for rent in Vake increased by 31 percent, in Saburtalo - by 82 percent, in Digomi - by 67 percent, compared to June 2018.

Compared to May 2018, in May 2019, an increase in demand for rent: was observed in Vake - by 18 percent; in Saburtalo - by 72 percent; in Digomi - by 46 percent.

Since January 2019, Georgia has adopted rules for the financial sector, which prohibit citizens from purchasing property without income confirmation. Loan ratios and its limit have been also changed.

According to the report, majority of the population of Georgia intended to buy apartments through long-term loans, while most regulations did not require confirmation of the solvency of the bank. Consequently, introduction of the new rules led to reduced demand for property purchases and, in turn, caused the increase in demand for rent.