Research & Insights

Tbilisi residential market has been growing at a steady pace over the last decade, however the recent changes in mortgage legislation have created a climate of uncertainty and fear. How is the market fearing a year on?

In this publication we review the residential sales dynamics with a special focus on the post-regulation market recovery. Additionally, we review the residential rental market in the Capital and assess its investment potential as opposed to that of the commercial leasing sector. 

THE REGULATORY SHOCK 

2019 has been a pivotal year for the residential market; issuance or new regulations has affected mortgage availability which represents a measure of the primary purchasing power of the Georgian clientele. Primarily, the regulations entailed a more robust assessment of creditworthiness, alleviation of the debt service burden on customer earnings as well as significant steps against the “dollarization” e.g. the lower bound of GEL 200,000 on issuance of loans in foreign currency. 

After strict regulations, mortgage credit lending growth has slowed consistently with a tightening of credit conditions which in turn produced market expectations that had a huge impact on mortgage lending growth. 

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