Let’s take a closer look to the real estate market of Batumi, the main resort of Georgia. The most profitable time to buy an apartment has come.
The autonomous republic of Adjara is the western region of Georgia. In the last few years, it has gone through major changes. Batumi is one of the most popular Georgian cities with urban architecture, developed infrastructure, beaches, mountains, warm climate, and breathtaking landscapes of the Black Sea shore.
The real estate market is blooming too. Lots of new residential complexes and resorts appear in the city and suburbs. The reason is the tourist and investment flow to Georgia.
Batumi is transforming very quickly together with economic improvements. The city is increasing its tourism potential; it will be able to compete with world resorts in the next few years. Compared to the first quarter of 2021 (+259%), the demand for real estate is also growing.
The types of real estate in Batumi depend on location, and developers. People buy real estate in Batumi for a number of reasons. Some people want to reside by the sea, others plan to make money on renting it out. The prices range from about 30,000 to 300,000 dollars for one property. It seems that the times of affordable housing soon to be gone. It is probably the best time to invest in Batumi, before it's too late.
In Georgia, foreigners are exempt from property tax which is a particularly inspiring fact. But is you purchase property for more than $ 100,000, you can obtain a short-term residence permit for a year. An investment residence permit lasts up to 5 years, but requires an investment $300,000.
The seashore is what makes you want to stay in the city. Here you can find high-profile development projects which means high prices with a high investment return.
Prices here usually range from $1,000 to $,200 per square meter. But they change fast because of a rapid growth and high demand.
The city center is the coast. There is a bigger range of prices compared to the beach. A square meter price begins at $400 to $1,000, you will have more options for smaller budget. Prices will rise slightly in the future.
The majority of the local population lives here. It is less developed than touristic districts. But here you can find detached houses with gardens.
However, several developers have begun the construction of villas and small residences. On the one hand, it's good news since development leads to the much-needed modernization. On the other hand, prices will follow the trend soon. For now, that area is cheaper than the other two; property prices start from $400 to $600 per square meter.
The underdeveloped part of the city. Although Batumi is growing: some districts have been recently added to the city limits. The interest of developers towards these areas are increasingly growing: many buyers and investors are looking for a quieter place to live which is located outside the crowded touristic areas but not too far away.
Prices in the area range from $400 to $1,000 per square meter.
The country has a pretty stable environment in terms of protecting the investments made into the country. There is a specific legal framework: Georgian legislation protects investors by law.
Another reason is Batumi itself. It is the second most visited place in the country after Tbilisi. The city is developing at a fast pace.
New apartments by the sea (even with the sea view) cost about $400 per square meter on average. It is low in comparison to most of the European countries. If you plan to reside in Batumi, you can start with renting a place, which is also a very affordable option.
A huge advantage is a 0% ownership tax. Not every country offers such favorable conditions for property buyers. Different regulations apply if you want to sell property in less than 2 years of ownership. In that case you need to pay 20% of tax. the property within the first 2 years of ownership — you should pay the state 20%.
Another positive thing is that you can register ownership in a matter of minutes. Foreign buyers and investors don't have any restrictions on buying apartments, houses, or other types of properties in Batumi and Georgian real estate market in general. The only exceptions are agricultural lands.
You can get a Georgian residence permit for buying any property in any region of Georgia for $100,000 or more, including Batumi.
Batumi is almost in between Europe and Asia. The border with Turkey allows the economy of the city to develop faster. An international airport is another highway to international transactions.
The Batumi real estate market is truly international. If in 2015 foreigners were participating in 14% of transactions, but in 2018 - already in 36%. Global demand provides real estate liquidity, stimulates the regional development, and brings income to apartment owners.
The Black Sea region of Adjara in Georgia received $106 million of foreign direct investment in the first nine months of 2022, the head of the government of Adjara Tornike Rizhvadze said in a report on the work of his office at the end of the year.
The budget of Adjara has tripled over the past 10 years and exceeded the threshold of 50 billion lari ($18.08 billion). It will help to plan new social projects and programs for residents, including education, and infrastructure.
According to TBC Capital Bank, in 2022, prices for renting apartments in Georgia soared by 60%, and 15% for buying apartments.
Apartment rental prices have increased by 60% since the second half of the year; at some point it was 116-120% per month and even more. As for the annual sale price, there is an increase of about 15%. The growth in 2022 was impressive, exceeding the pre-pandemic level.
As for commercial real estate, the occupancy of shopping centers has increased significantly, which means that the volume of unused rental space has decreased, and rental prices have increased by 22%. As for the objects of street trade, we have not yet reached the 2019 mark in the rental part. To date, the vacancy rate is 11%, and only 11% are unoccupied, which is a significant increase, an improvement of 23% has been recorded.
According to the latest data from the National Statistical Office of Georgia, the country's economy grew by 10% in the first 10 months of 2022. At the same time, the annual GDP growth was 8.3%.
Areas including construction, transport and warehousing, financial and insurance activities and mining have made a "significant contribution" to economic growth.
The European Bank for Reconstruction and Development recently raised its forecast for Georgia's economic growth, saying it expects the domestic economy to grow by 8% this year, which is "significantly higher" than the previously projected three percent growth.
In addition, the Asian Development Bank predicts that Georgia's economy will grow by 7% in 2022 "due to increased income from exports and tourism, large inflows of remittances and strong private consumption."
ADB also forecasts Georgia's real gross domestic product to grow at 6% in 2023, which is an update of previous estimates in April, when it predicted growth of 3.5% in 2022 and 5% in 2023 for Georgia.
There are no restrictions for citizens of other countries, whether you want to buy an apartment or invest in a hotel project. You can register real estate even as a legal entity and transfer funds to Batumi from the company's account. To make a transaction you only need only a passport.
All the formalities will take no more than two hours. After signing the contract with the developer, the new owner goes to the House of Justice, where their name is entered into the state register of real estate. You have to pay the fee for the registration of ownership of $15.
Buyers can carry out the transaction remotely by paying by bank transfer. They receive all the documents and receipts from the developer in electronic form.
