Residential Real Estate Sector Analysis REPORT UPDATE 9M 2019

  • Sales are down, with the decrease observed both in sold residential units and in sold apartment area. We believe that somewhat steeper decline might be concealed by the lag in the registration of sales.
  • While the YoY decline can be partly explained by the high base of 2018, sales declined relative to the previous quarter as well. On the other hand, the market activity remains stronger compared to year 2017.
  • The depreciation of GEL resulted in less demand for residential properties. The slow-down of mortgage growth also had its toll on sales. As a counter-measure, the developers are more actively engaged in inner-installment schemes.
  • The interest rates on GEL mortgage loans started to increase, making the GEL mortgages costlier. This, together with the decreased reserve requirements in FX and stable or appreciating GEL, should contribute to the growth of foreign currency mortgages.
  • The construction permits picked up, indicating the increase in future supply.
  • The overall price level increased in GEL, but decreased in USD, explained by the depreciation of local currency relative to USD.


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