Israelis Lead Among Foreign Homebuyers in Tbilisi

Buyers from Israel lead Tbilisi’s residential real estate market among foreign investors. According to Galt & Taggart’s August 2025 report, their share amounted to 12% of all new-apartment transactions—equivalent to nearly half of foreign purchases. The result highlights a notable shift in the balance and the growing influence of this group on the capital’s market.

The study, covering more than 140 projects and about 45% of the capital’s new-build market, shows that foreign buyers overall accounted for nearly a quarter of all deals. Russians represented only 2%, while other countries together made up 11%. As a result, the share of Israeli citizens was almost five times higher than the nearest group and effectively forms the core of overseas demand.

Buyer activity—including investors from Israel—is largely explained by market features noted by developers themselves. A key role is played by the widespread use of instalment plans: a significant share of transactions is completed without a single lump-sum payment, lowering the entry barrier and making purchases accessible to a wider range of clients. Survey data indicate that instalments remain the main sales tool, while bank mortgages still account for a smaller share of deals.



A high level of trust in developers enables active sales even at the construction stage. In projects scheduled for completion in 2025, more than 80% of units have already been sold, and in some new complexes the figure is even higher. Pre-sales have effectively become the market’s main engine: apartments are snapped up long before completion, confirming buyers’ confidence in long-term price dynamics and rental-income potential.



The demand structure underscores the investment nature of the market. More than half of sales (52%) are for medium-sized units—51–80 sq m—convenient for rental. A quarter of transactions involve small units (35–50 sq m). Around 20% are for units sized 81–150 sq m.



Budget units priced below $1,100 per sq m account for about 58% of sales. The mid-range ($1,101–2,000) takes 36%. Premium properties above $2,000 per sq m make up just 4% of the market. However, foreigners—including Israelis—more often choose the mid and upper segments, exerting noticeable upward pressure on prices.



Prices vary significantly by location. The most expensive areas—Mtatsminda ($2,943 per sq m) and Vake ($2,600)—confirm their premium status. More affordable districts such as Samgori and Gldani (around $1,050 per sq m) are seeing active development and attract yield-oriented investors. In Didi Dighomi, where the price is about $1,060 per sq m, sales have reached record levels, and the district has become one of the main hubs of new construction.



Tbilisi’s overall market is showing steady growth. In January–August 2025, 25,636 transactions totaling $2 billion were registered, 5.2% more than a year earlier. Despite the traditional seasonal dip in August after a record July, prices continued to rise: on the primary market the price reached $1,341 per sq m, and on the “new secondary” market—$1,299. This confirms the resilience of demand and investors’ willingness to act even amid high competition.



Strong demand is also stimulating supply expansion. In the first eight months of 2025, the volume of construction permits issued increased by 3.3% year-on-year. The rental market remains a key pillar of attractiveness for foreign investors. In August 2025, average yields held at 8.6%.



A comparison with other regional capitals underscores Tbilisi’s competitiveness. Yields in Vilnius are 3%, Tallinn 3.3%, Sofia 4.1%, and Riga and Bucharest around 4.2%. Higher figures are recorded only in certain cities of the South Caucasus and Central Asia: Yerevan reaches 6.3%, Baku 5.1%, and Tashkent and Ankara 8.3%. Against this backdrop, Tbilisi with 8.6% remains a leader among the capitals of Eastern Europe and the South Caucasus.

However, in terms of rental yields and the popularity of investments, Georgia’s capital lags behind another major centre—Batumi. There the market is geared toward tourist flows, and profitability is supported by strong demand for accommodation in hotels, especially in the summer season. An additional advantage for the resort is the active development of the coastal Gonio area, where luxury-category hotel complexes are being built. The presence of international hotel brands enhances the location’s prestige and makes investments more attractive.



It’s clear from the market that the apartment segment is oversupplied, competition for tenants is intense, and operating costs and vacancy materially eat into returns. Even though gross yields on apartments in Georgia are higher than in most EU capitals, they remain noticeably inferior to hotel products.

Statistics should be viewed across the entire pool of accommodation types—from city apartments to aparthotels and hotel rooms. Professionally managed formats (especially hotel rooms) deliver more stable occupancy and a more predictable cash flow thanks to networked sales channels and standardized service, whereas the apartment market remains overheated and price competition is intensifying there.

If the goal is yield, the focus should shift from traditional apartments to hotel solutions with a transparent management model, contracted (or demonstrably proven) occupancy, and clear reporting. Apartments should be approached cautiously and conservatively, bearing in mind the saturated supply and the constraints on real (as opposed to advertised) returns.