In recent years, Georgia’s real estate market has undergone a significant transformation. Rising construction material costs, increased demand, and urban development have pushed development prices to a new milestone. In this blog, we will discuss current prices and the factors that will shape future trends.
Residential Real Estate Price Index (RPPI)
According to Geostat’s 2025 residential real estate price data, the residential property price index increased by an annual average of 10-15%. The growth is particularly noticeable in the newly built apartment segment. For detailed data, see Geostat’s Residential Real Estate Price Index.
Average Apartment Prices in Tbilisi
According to TBC Capital’s June 2025 data, the average selling price of residential space in Tbilisi stands at $1,269 per square meter, which is an 8% increase compared to the same period of the previous year.
The number of transactions in June 2025 increased by 11% and reached 3,236 units, while the total market volume reached $264 million.
Construction Cost
According to the same study, the construction cost index (in USD) increased by 4.0% annually. Particularly noteworthy is the significant increase in wages within the construction sector — up by 16.7% compared to the previous year.
Price Distribution by Tbilisi Districts
- Vake: $1,926
- Mtatsminda: $1,901
- Saburtalo: $1,524
- Didi Dighomi: $1,134
- Gldani: $1,130
- Samgორი: $1,026 For detailed information, you can check the link: TBC Capital Research
Why Are Development Prices Rising?
Wage and Material Growth in the Construction Sector: Based on market observation, wages in the construction sector are rising much faster than the average annual inflation; similarly, material and logistics costs increase every year.
Construction Regulations: The new construction code and safety standards increase the net cost of projects.
Scarcity of Investment Land: Less and less space is left in Tbilisi and large cities of Georgia where multi-apartment buildings can be constructed. Consequently, the demand for them grows, and the price per square meter of investment land increases.
Energy Efficiency:
Modern developers are increasingly using energy-efficient materials, which saves utility costs in the long run, though it increases the initial price. This is driven, on one hand, by rising consumer awareness and, on the other hand, by government regulations.
Real Estate Price Forecast in 2026
Decrease in Real Estate Rental Prices
According to TBC Capital’s data, rental prices decreased by 11% annually, which led to a reduction in rental yields, bringing them to 8.7%. When rent decreases, real estate becomes less attractive as an investment asset, which slows down the growth rate of property prices.
Increased Supply in the Real Estate Sector
Despite the fact that less and less land is left in large cities where multi-apartment residential spaces can be built, the volume of construction permits issued in the first half of 2025 exceeds the previous year’s figure by 17% (TBC Capital). This indicates that, in the short term, the demand for apartments (11% growth) is lagging behind the growth rate of issuing construction permits (17%).
Summary of Apartment Prices
Based on existing data, a radical drop in prices in 2026 is unlikely, because the net cost of construction (especially wages) has increased significantly. In 2026, prices are expected to remain stable or show moderate (slower) growth. Sharp increases will be hindered by the drop in rental prices and the abundance of new projects, while a drop in prices will be prevented by the high net cost of construction.
Apartment Renovation
In case you are interested in purchasing an apartment, it is an essential factor to consider the cost of its renovation. Before you buy an apartment, make sure to calculate what it will cost to renovate your desired space:
- To calculate renovation costs, follow the link: Renovation Calculator
Building a Private House
Building a Private House
Due to the rising prices of apartments, the idea of building a private house is becoming increasingly popular. If you decide to build a private house instead of buying an apartment, calculate what the full construction process will cost you. To calculate, follow the link: Construction Calculator