"Prices Will Continue to Rise at a Moderate Pace in Line with Inflation and the Economy" — Developer's Forecast

Ira Melimonadze, co-founder and Business Development Director at Lemons Development (lemons.ge), shared insights into the reasons behind rising real estate prices in Tbilisi, current market trends, and future forecasts.

— Based on your observations, what has driven the increase in real estate prices in Tbilisi?

The key driving factors can be divided into several areas:

Surge in demand: migration inflows (particularly since 2022–2023) and interest from foreign investors and buyers have significantly boosted demand for both residential purchases and rentals.

Higher construction costs: due to global inflation and the restructuring of supply chains, building materials, labor, and land plots in desirable districts of Tbilisi have become more expensive.

National currency rate and inflation: amid fluctuations in the lari exchange rate and broader inflationary pressures, real estate has come to be seen as the most reliable way to preserve capital and hedge against inflation. For this reason, the attention of small, medium, and large investors is constantly focused on real estate. This factor fuels demand, which naturally leads to steady price appreciation.

— What trends are currently visible in the market?

Market price stabilization and moderate growth: after a sharp, volatile spike, the market has relatively balanced out and entered a phase of moderate and steady growth.

Neighborhood diversification: due to price peaks in prime central locations (Vake, Saburtalo, Mtatsminda), demand and construction activity are increasingly shifting toward peripheral and emerging districts (Didi Dighomi, Samgori, Gldani, and the suburbs of Tbilisi).

Rental market adjustment: rental rates have peaked and stabilized to a degree, yet they still remain at a noticeably high level compared to the pre-pandemic period.

Demand for energy efficiency, quality, and new building codes: buyers have become much more discerning regarding apartment layouts, infrastructure, and energy efficiency standards.

— What is your forecast: will this growth be irreversible going forward?

Over the long term, this process is irreversible (the likelihood of a downturn is extremely low). A prolonged and sharp drop in real estate prices in Tbilisi is unlikely. Prices will continue to climb, but at a moderate rather than aggressive pace, aligned with inflation and overall economic growth.

In certain segments (for example, secondary housing stock or illiquid properties), a minor correction in demand and pricing may occur; however, for new-build properties and modern developments, growth rates will persist and become even more sustainable over time.