Residential Real Estate Sector Analysis – Q1 2019 Report Update

  • Sales of apartments in Q1 2019 have not decreased as compared to sales of Q1 2018 in Tbilisi, they are on the same level. The expected decline in comparison to Q4 2018 can partially be explained by seasonality as well as record high activity on market by the end of last year.
  • Despite no tangible decrease, there has been a deviation from the trend: For years the first quarter numbers had been higher than that of the year before. Presently this is not the case.
  • YoY sales in January are up 6%, slightly up in February by 1% and are -6% down in March. It is too early to stipulate, if a second half of the quarter is a good story-teller.
  • In Q1 2019, sales of the new apartments have grown YoY, whereas the sales of the old apartments have decreased, driven by decline in transactions of relatively smaller apartments.
  • The mortgage portfolio showed a minor growth in Q1 2019. The amount and quantity of mortgages disbursed in Q1 2019 is lower than in Q1 2018.
  • Interest rates on mortgages in GEL have started to decline, as predicted, to stimulate the demand.
  • The sales weighted average selling price has been stable, displaying a negligible decline overall relative to Q4 2018. Delving deeper, the price of new apartments has displayed a marginal growth, whereas the prices for old apartments have somewhat declined.
  • We add the sensitivity analysis according to the key inputs to the mortgage affordability calculation for apartments in Tbilisi.

 

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