Colliers Forecast: Georgia’s Housing Prices to Remain Stable in 2026

The average price per square meter of residential property in Tbilisi and Batumi stands at 1,500 US dollars, said Leo Chikava, Head of Research at Colliers Georgia, in a comment to Commersant.ge. According to him, current trends on the primary and secondary markets do not indicate any likely price decrease in 2026.

What is shaping the market trajectory

Leo Chikava explained that two opposing factors will be at play in 2026. The first is the entry to the market of projects launched in 2022, at the height of the construction boom. These units will feed into the secondary segment and increase supply. The second factor is banks’ decision to reduce financing for new development projects in 2025, which will limit future construction and restrain long-term growth in supply. The expert emphasizes that the impact of these two processes will be mutually offsetting and will not lead to a downward correction in the price per square meter.

The Colliers Georgia representative added that sales dynamics in 2025 were uneven. In Tbilisi, demand weakened during the first four months of the year, which may be linked to political developments. In Batumi, no comparable drop in activity was recorded over the same period. From May onward, sales in both cities started to grow, and Colliers expects full-year figures to exceed 2024 levels.

The buyer structure differs significantly between the two markets. In Tbilisi, about 90% of transactions are made by Georgian citizens, 4% by buyers from Israel and 2% by buyers from Russia. In Batumi, Georgians account for around 50% of market participants, Russians for 16% and Ukrainians for 9%. This composition of demand, the expert notes, explains the difference in sales dynamics between the cities and influences overall price stability.

Batumi: oversupply of apartments and falling yields

In a study focused on Batumi, analysts at Galt & Taggart point out that buyer activity in the apartment market has already started to decline. In 2022–2023, between 3,000 and 3,400 units in new developments were sold annually, while in 2024 the figure was around 2,000. In the first eight months of 2025, only 1,500 units were sold, against a supply of about 6,000. The market is experiencing an oversupply of apartments. Around 30% of new units move to the secondary market within the first two years after commissioning, and sales in this segment have nearly halved compared to 2022.

The housing stock in Batumi continues to grow. In 2020, the city had 86,000 apartments; by 2024, this figure had reached 119,000. Between 2025 and 2029, around 58,000 new units are expected to be delivered, of which 46,300 are designed for short-term rental — that is 80% of the total pipeline. In some districts, the share of investment apartments reaches 96%.

For investors, this is a worrying signal. Against the backdrop of oversupply, gross yields have already started to decline: according to Galt & Taggart, they were estimated at around 10% in 2023 and about 7.4% in 2025. Going forward, this figure may drop to 5.1% and even as low as 3.4%.

Real profitability of apartments: International Investment calculations

Experts at International Investment stress that the nominal yield of apartments in the range of 7–6% is not achievable in practice. Once all operating expenses are deducted — cleaning, platform commissions, management, vacancy periods, utilities, repairs — the actual figure shifts into the 3–4% range. And this is only under professional management; in most cases, real numbers are even lower.

Additional calculations show that if the apartment stock doubles — the scenario embedded in Galt & Taggart’s forecasts — real net yields are likely to fall to 1.5–2%.

As an example, analysts used a fully finished and furnished studio of 35 sq m priced at 59,500 US dollars. Under long-term rental, it can be leased around 11 months a year at an average monthly rate of 300 dollars, generating 3,300 dollars in gross income. After deducting all expenses — agent fee, minor repairs, a service charge of 1.5 dollars per square meter and other mandatory payments — about 1,870 dollars remain, which corresponds to a yield of roughly 3% and a payback period of around 32 years.

Daily rental looks better in gross terms — 5,965 dollars per year at an average occupancy of 43.13%. However, expenses reduce net income to 1,714 dollars, which is about 2.8%. Commissions charged by online travel agencies and platforms total 1,789 dollars. Management and cleaning cost 596 dollars. Utility bills amount to 536 dollars. Consumables and minor repairs reach 700 dollars. The service charge comes to 630 dollars.

The average nightly rate in standard apartments stands at 34 dollars, with occupancy at 31%, which brings only 3,847 dollars per year. In practice, without professional management many units end up with a net yield close to 0% or even negative due to low year-round occupancy.

In apartment buildings, there is no unified operating budget, so each owner bears the costs individually. All expenses — from service charges to repairs and vacancy — fall entirely on a single landlord. Most buildings are delivered without proper infrastructure and without unified operating standards, which lowers the quality of the product and limits the ability to maintain pricing power.

From apartments to hotels: a shift in the investment model

In this environment, investor interest is gradually shifting toward hotel projects, where the operating model is fundamentally different. Demand is supported by brand recognition, on-site infrastructure, professional marketing and standardized management, while costs are spread evenly across the entire property.

The economics of the hotel segment are also markedly different. With an average nightly rate of 310 dollars in the low season and 520 dollars in the high season, and 274 guaranteed bookings per year, gross revenue reaches 57,714 dollars. After subtracting personnel costs, marketing and technical maintenance — a total of 23,086 dollars — net profit stands at 34,629 dollars.

Occupancy in branded hotels in Batumi has been rising for three consecutive years: it stood at 68.6% in 2022, 70% in 2023 and 71% in 2024. The average nightly rate is around 286 dollars, and this level is maintained thanks to infrastructure, marketing effort and stable demand throughout the year.

The contrast with apartments is striking. The average nightly rate in apartments is about 34 dollars versus 286 dollars in branded hotels. Occupancy is around 31% versus 68.6%. Gross annual income is roughly 3,847 dollars versus more than 70,000 dollars in the hotel segment.

Even taking into account the difference in price per square meter — about 1,890 dollars in apartments versus 8,300 dollars in a luxury-level branded hotel — efficiency is still on the side of hotel projects, with revenue per square meter almost five times higher.

Strong performance is driven not only by occupancy. A hotel operates a restaurant, front office, reservations team, marketing department and technical services — all of which support room rates and consistent year-round demand. For an investor, this means the absence of operational risks and predictable cash flows.

At the same time, there is still a shortage of quality hotels in Batumi: the market is dominated by city hotels and a limited number of international brands. As a result, demand for luxury and all-inclusive formats remains high. One of the most significant projects is the Wyndham Grand Batumi Gonio hotel complex, which is being developed in a prestigious resort area that has also attracted other international players, including a major UAE-based developer. Experts are confident that the position of luxury hotels will continue to strengthen, ensuring year-round resilience and superior returns.