BAKU, Azerbaijan, August 3. Georgia’s residential property market is being supported by stable fundamental demand driven by growing urbanization, declining household size, rising incomes and attractive investment returns, Galt & Taggart, an investment banking arm of Lion Finance Group, told Trend in an exclusive comment.
According to Galt & Taggart, price growth in Georgia’s residential property market has stabilized, with primary market prices in Tbilisi rising by 6.1% year-on-year in May. The company expects price growth to remain within the 5-7% range annually, supported by long-term demand factors.
"Price growth has stabilized. Based on our analysis, primary market price rose by 6.1% year-on-year in May. We expect price growth to remain within 5-7% year-on-year, supported by stable fundamental demand, backed by growing urbanization, declining household size, rising incomes and attractive investment returns," Galt & Taggart said.
The company noted that the current phase of the market differs from the period of rapid price increases seen in previous years, as demand is increasingly linked to structural economic factors. According to Galt & Taggart, residential property remains attractive for investors due to a combination of market fundamentals and returns.
Commenting on changes in buyer profiles, Galt & Taggart said that the post-war migration wave mainly affected rental demand and yields, while it did not become the primary driver of residential property sales in Tbilisi. "The post-war migration wave primarily increased rents and yields, but migrants did not become the main driver of Tbilisi sales, where higher investment attractiveness primarily encouraged purchases by Georgians," the company said.
According to the investment banking firm’s data, Georgian buyers accounted for 76% of surveyed primary sales in Tbilisi in 2026, while Israeli buyers represented 11% and Russian buyers only 3%. In Batumi, demand was more diversified, with Georgians accounting for 37% of surveyed primary sales, followed by European buyers at 18%, Ukraine-Russia-Belarus buyers at 16%, Israeli buyers at 10%, and buyers from Arabic countries at 3%.
Galt & Taggart noted that the shift in buyer composition reflects the evolving structure of demand in Georgia’s property market. While foreign inflows influenced rental activity, the company said that local investors have remained a key source of demand for residential purchases in Tbilisi.
Assessing the role of rental income in supporting market valuations, Galt & Taggart said that Tbilisi continues to offer attractive rental returns. "Tbilisi’s gross rental yield stood at 8.4% in May 2026, broadly in line with its long-term average of around 8-9%. Average rent has stabilized at around $10 per square meter and we expect it to remain broadly sustainable," the company said.
The company added that stable rental yields remain an important factor supporting investor interest in the residential property segment, particularly amid continued tourism activity and demand for rental accommodation.
Earlier, National Statistics Office of Georgia (Geostat) announced that Georgia’s Residential Property Price Index rose 4.9% year-on-year in Q2 2026, with prices now 63.8% above the 2020 average. The index covers the new residential property market in Tbilisi, including flats and detached houses.
Trend’s analysis shows that the current pace of growth represents a significant moderation from the sharp price increases recorded in 2022-2023, when Tbilisi’s new-build market absorbed a large wave of demand from Russian and Belarusian buyers following the outbreak of the conflict in Ukraine. Annual growth during that period is estimated to have peaked at 35-40% in 2022 before slowing to 15-20% in 2023 and 8-10% in 2024.
The Q2 2026 growth rate indicates that the market is gradually moving toward a more balanced trajectory. At the same time, new-build residential prices continue to increase in real terms, remaining above Georgia’s consumer price inflation rate, which is currently around 3.2%.
Since 2020, Tbilisi’s new-build residential prices have increased by 63.8%, representing an average annual growth rate of approximately 8.6%. The market has absorbed the earlier external demand shock and is now being shaped by domestic income growth, investment returns and tourism-supported rental demand.
