Tbilisi’s residential market remains busy. In August the city recorded 3,388 apartment transactions, up 18.9% year on year, worth $297 million, up 35.2%, according to Colliers. Sales in new projects rose 23.7%, concentrated in Samgori and Didi Dighomi, and the share of foreign buyers rose to 14% from 12%.
Credit is doing the work
Mortgage lending is growing even faster. Between January and July, banks issued GEL 3.58 billion in mortgages, up 46.5%, across 34,482 loans, up 20.7%. The minimum down payment was lowered from 15% to 10%, and the average rate on new lari mortgages fell to 11.38% in July, 1.71 percentage points lower than a year earlier. Bank deposits reached GEL 75.67 billion at the end of August, up 21.7% year on year excluding exchange-rate effects.
The inflation backdrop
Annual inflation was 5.6% in August, well above the National Bank’s 3% target, although core inflation was lower at 3.6%. In September the National Bank kept its refinancing rate at 8.25%.
Why it matters for leaders
Easier credit is supporting prices and developers’ sales. If inflation stays high, borrowing costs are unlikely to fall quickly. Investors and developers should plan for a market in which demand depends more on mortgage conditions than on cash buyers.
Sources
Photo: K T / Unsplash