Georgia holds a strong position in both rankings. Let’s take a closer look at each of them.
“Best Countries to Invest in Real Estate” – under this title, international real estate research platform Global Property Guide has published its updated September data.
The list includes data for nearly 80 countries. The study compares countries in terms of their attractiveness for real estate investment and shows where buying residential property for subsequent rental may offer stronger returns.
The countries are compared using the following indicators: Gross Rental Yield; 5Y Price Change (Nominal); 5Y Price Change (Adjusted); 5Y Rent Price Change; and Mortgage Rate.
According to Global Property Guide, with a Gross Rental Yield of 7.25%, Georgia ranks 15th among the countries included in the comparison.
Note: The countries in the table are listed in alphabetical order, not by ranking.
For reference, Gross Rental Yield shows the rental income generated by a property relative to its purchase price. It is calculated by dividing the property’s annual rental income by its purchase price and multiplying the result by 100. For example, if a property generates GEL 10,000 in rental income per year and was purchased for GEL 200,000, its Gross Rental Yield is 5% (10,000 ÷ 200,000 × 100 = 5%.) It is important to note that Gross Rental Yield does not take into account taxes, repairs, maintenance or other expenses.
In the Global Property Guide comparison, Georgia’s rental yield is higher than in a number of developed markets. For example, Gross Rental Yield stands at 6.71% in the United States, 6.61% in Italy, 5.43% in Spain, 4.83% in France and 3.42% in Germany.
Slightly higher yields than Georgia are recorded in the United Kingdom at 7.35%, Ireland at 7.66% and Turkey at 7.86%.
The analysis of Georgia’s market is based on data from Tbilisi and Batumi. Average Gross Rental Yield stands at 7.23% in Tbilisi and 7.28% in Batumi. However, yields vary considerably depending on both the location and the size of the apartment.
Looking more closely at the Georgia-specific data, smaller residential properties show some of the highest rental yields in Tbilisi. A studio apartment in Didi Digomi has a Gross Rental Yield of 8.47%, compared with 8.27% in Isani and 8.06% in Varketili.
Lower yields are recorded for three-bedroom apartments in Vake and Saburtalo, at 5.09% and 5.42%, respectively.
In Batumi, the average Gross Rental Yield is 7.28%. Across the city, the average yield for studio apartments is 8.35%, while one-bedroom apartments generate an average yield of 8.08%.
Overall, Global Property Guide rates Georgia’s 7.25% Gross Rental Yield as “Very Good”.
Other indicators for real estate investment in Georgia presented by Global Property Guide are as follows:
• 5Y Price Change (Nominal) 48.4%;
• 5Y Price Change (Adjusted) 16.08%;
• 5Y Rent Price Change 49.73%;
• Mortgage Rate 11.64%.
In Georgia’s case, strong rental yields contrast with the high cost of bank financing. The country’s 11.64% mortgage rate is significantly higher than the rates recorded in most European markets. For comparison, according to the same study, the mortgage rate is 3.95% in Germany, 3.16% in France, 2.89% in Spain and 3.49% in Italy.
Georgia’s attractiveness as a real estate investment market is also reflected in data from another international platform, the Global Property Index.
Published by Asset Global Group, the index compares 100 cities worldwide and evaluates their investment environment across nine metrics: Rental Yield, Market Stability, Liquidity, Affordability, Governance, Security & Tourism, Tax System, Investment Migration and Infrastructure.
Georgia’s capital is also included in the index. According to the latest available data, Tbilisi has an Investment Score of 67 out of 100 and ranks 18th globally.
Tbilisi receives its highest scores for Rental Yield and Tax System, with 80 points in each category. Affordability is rated at 75 points, while Security & Tourism and Investment Migration both receive 70 points. The capital receives comparatively lower scores for Market Stability and Liquidity, at 50 points each.
Overall, the data show that Georgia holds a strong position globally from a real estate investment perspective. Its key advantages include relatively high rental yields, comparatively affordable property prices and a favourable tax environment.
However, the picture is not entirely one-sided. The studies also highlight the high cost of financing property purchases in Georgia due to elevated mortgage rates, while Market Stability and Liquidity remain comparatively weaker areas in Tbilisi’s assessment.
If this article has sparked your interest in real estate investment, contact us for a consultation. Kedaro Group will help you select a property that matches your goals and budget.
Sources: Global Property Guide; Global Property Index
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Author: Lika Kasradze
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