Real Estate
Posted: 2 years ago

Tornike Kordzaia: Residential Apartments in June Cheapened by 8% compared to January

In June residential apartments have cheapened by 8% compared to January, TBC Capital research director Tornike Kordzaia told Business Morning TV Program.

Both expensive and low-cost apartments have declined in prices.

“We have estimated the real estate prices before enforcement of the mortgage loans subsidization program in June. We have the following dynamics – prices have declined by averaged 8%.

Old apartments cheapened by about 9%, while prices of new apartments declined by 5%. These trends reflect discounts that developers implement for sales of apartments.

In most cases, we have better dynamics of estimating sold apartments, compared to year on year contraction in price. In this case, the reduction is about 3%. Comparatively higher-cost segment quitted the category of expensive apartments in June and this factor lowers the price”, Tornike Kordzaia said.

Reduction in rentals was slightly improved in June, however, only June indicators cannot outline the real situation. Therefore, it is important to know whether this tendency will be continued or not, he said.

„The National Bank has submitted one more indicator for June – rentals. In this case, rentals have cheapened by 10% compared to the highest indicator of February. At the same time, the rentals in May had declined by 12.5% and this signifies in June rentals have slightly improved”, Tornike Kordzaia noted.

After enforcement of the state subsidization program, the inflow of mortgage loan applications to commercial banks increased by 52%, while the state program will affect sales in about 2 weeks, Kordzaia pointed out.