Activity in Georgia’s residential real estate market remains high this year.
Sales, prices, construction costs are increasing. At the same time, loan servicing conditions will change from 2027, particularly affecting borrowers with monthly incomes of GEL 1,500-2,500.
How Prices Have Changed in Recent Years
Demand has remained high this year in both the primary and secondary markets. According to Galt & Taggart’s July 2026 data, sales on the secondary market increased by 18.8% year-on-year and reached their highest monthly level since 2022. Prices increased in both markets. The pace of growth accelerated in the primary market, while prices on the secondary market continued to rise after stabilizing in previous months. Sales on the primary market, which are affected by delayed registrations, increased by 24.4% year-on-year.
The average sale price of an apartment in Tbilisi stands at $1,426, representing an increase of around 10% over two years compared with the same period of 2024.
In Tbilisi’s most expensive districts, Vake and Mtatsminda, the average sale price per square meter is around $3,000. In Chughureti, it is around $2,300, in Saburtalo around $1,700, in Didube and Isani around $1,400, and in Didi Dighomi, Gldani and Samgori around $1,100.
Galt & Taggart’s July 2026 study shows that demand in Tbilisi’s residential market is concentrated mainly on medium-sized apartments. In the first seven months of 2026, 53.8% of apartments sold were 51-80 sq. m. Small apartments of 35-50 sq. m accounted for 24.6%, apartments of 81-150 sq. m for 19.7%, while very large apartments of 151-250 sq. m accounted for only 2%. This means that the main demand in the market is for medium-sized housing.
According to Geostat, compared with the 2020 average, prices for new residential real estate in Tbilisi have increased by 63.8% over the past six years. Prices in the apartment segment increased by 61.2%, while prices for private houses rose by 68.2%. In the second quarter of 2026, prices for new residential real estate in Tbilisi increased by 4.9% compared with the same period of the previous year. In the apartment segment, growth stood at 4.8%, while prices for private houses increased by 5.5%.
Turning to rental prices, according to July 2026 data, the average rent per square meter is around $10. By district, rents in Vake and Mtatsminda are around $13-15 per square meter, in Saburtalo around $11, in Didube, Chughureti, Isani and Nadzaladevi around $9-10, and in Didi Dighomi, Gldani and Samgori around $8. Compared with July 2024, rents have increased by around 3%.
Increase in Construction Costs
Overall construction-related costs in Georgia have increased by 30% over the past four years. According to the latest July data from the National Statistics Office of Georgia, the residential segment index decreased by 1.3% compared with the previous month, while it increased by 0.5% compared with the same month of the previous year.
It should be noted that a 30% increase in construction costs does not mean that apartment sale prices should have increased by the same percentage. Construction costs are only one component of the final price of real estate. Other factors include land prices, financing costs, project type, location, developer margins and various market demand factors.
The Role of Mortgage Lending
Between January and August 2026, commercial banks operating in Georgia issued a total of 39,714 new mortgage loans worth GEL 4.1 billion.
According to the National Bank of Georgia, the mortgage loan portfolio increased by 47% in value terms, while the number of loans increased by 22%. In August 2026, the average interest rate on mortgage loans issued in the national currency was 11.19%, which was 1.9 percentage points lower than in the same period of the previous year. Overall, the mortgage loan portfolio issued by Georgian banks has reached GEL 14.6 billion. A total of 176,000 mortgage loans are currently active in the country.
It should also be taken into account that the conditions for issuing mortgage and other loans will tighten from 2027. Today, if a person’s monthly income is below GEL 1,500, the total monthly payment on all of their loans must not exceed 25% of their income. For those earning more than GEL 1,500, the permitted limit is 50%.
From February 1, 2027, the 25% threshold will apply to incomes of up to GEL 2,000, while from September 1 it will be extended to incomes of up to GEL 2,500. If your income is up to GEL 2,500, the bank will no longer allow half of your income to be spent on loan repayments. Only around one quarter may be considered permissible. This means that under the new rules, obtaining a larger mortgage with the same income will become more difficult, as the monthly debt burden permitted by banks will be reduced.
Construction Permits
The number of construction permits alone is not sufficient to assess whether supply in the real estate market is increasing or decreasing. One permit may relate to a small-scale project, while another may cover a large multifunctional complex consisting of several buildings. Therefore, alongside the number of permits, a more important indicator is the number of square meters covered by those permits and how many of the projects have already been completed.
A look at the statistics shows the following:
According to Galt & Taggart, the volume of residential space covered by issued permits continued to increase on the supply side. Despite a downward trend at the beginning of the year, the total area covered by permits almost matched the level recorded in the same period of the previous year.
In Tbilisi, 343 permits for residential real estate were issued in 2016, 258 in 2023, 233 in 2024 and 208 in 2025. In the first seven months of 2026, 111 permits were issued, compared with 121 during the same period of 2025.
As for the volume covered by construction permits, the permitted residential area amounted to around 1.94 million square meters in 2023, 1.81 million in 2024 and 1.73 million square meters in 2025. A downward trend in permit issuance was indeed observed at the beginning of 2026, although this trend later changed. According to the study, in July the permitted residential area increased by 50.3% year-on-year and reached 182.8 thousand square meters. As a result, the total for the first seven months of 2026 almost matched the same period of the previous year, with a decline of only 0.3%.
Therefore, it would not be accurate to say that construction permits were sharply restricted in 2026.
Another important factor when assessing supply is that an issued permit does not automatically mean a completed apartment that has already entered the market. A permit only shows the volume of construction that is planned or authorized. To determine whether there is actually an oversupply in the market, it is necessary to look at how many projects have been completed, how many are still under construction, how many apartments have already been sold and how many remain available for sale.
Among the development projects surveyed by Galt & Taggart, 79% of the housing stock scheduled for completion in 2026 has already been sold, while 21% remains available for sale. In projects scheduled for completion in 2027, 66% has been sold and 34% remains available. In projects scheduled for completion in 2028-2029, 59% has been sold and 41% remains available.
Geostat’s data on construction permits nationwide also provide additional context. According to officially declared data, 5,391 permits were issued in Georgia in January-June 2026, 0.6% fewer than in the same period of the previous year. The permits covered the construction of buildings with a total area of 5,275.7 thousand square meters, 1.7% more than in the same period of the previous year. Tbilisi accounted for 49.2% of planned construction works, Kvemo Kartli for 9.2%, Adjara for 7.6% and Kakheti for 7.3%.
In January-June 2026, 1,459 facilities with a total area of 1,546.2 thousand square meters were put into operation. The completed area was 3.6% lower than in the same period of the previous year, while the number of completed facilities was down 5.3%.
The available data indicate that a large volume of residential construction has been planned in Tbilisi in recent years and that new supply will enter the market in the coming years.
What Role Do Foreign Buyers Play?
According to Galt & Taggart, the share of foreign buyers in primary market sales has increased in recent years. In 2023, Georgian citizens accounted for 85% of sales, meaning foreign buyers accounted for 15%. The share of foreign buyers increased to 21% in 2024, 24% in 2025 and 26% in the first seven months of 2026. Among foreign buyers, citizens of Israel and Russia are the leading groups.
Summary
There is no single answer to the question of what is driving the increase in residential real estate prices. Price growth cannot be explained by one factor alone. In 2022, the migration shock had a significant impact, sharply increasing demand for housing, particularly rental housing.
In its 2023 report, Galt & Taggart wrote that the arrival of migrants from Russia, Belarus and Ukraine sharply increased demand for housing, particularly rentals. By the end of 2022, rents in Tbilisi had increased by around 112% in US dollar terms compared with pre-war levels, while real estate prices had risen by 28.3%. The World Bank also noted that the inflow of migrants into Georgia in 2022 sharply increased demand for housing and drove rapid growth in rental prices.
However, other factors are now also influencing the current market. “Increased market activity was supported by improved sentiment and a favorable macroeconomic environment, including the strengthening of the lari and lower interest rates,” Galt & Taggart said in its latest report.
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Author: Lika Kasradze
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