In recent years, Tbilisi, the vibrant capital of Georgia, has become an increasingly attractive destination for foreign investors in the real estate market. Georgia’s foreign direct investment (FDI) in real estate reached approximately $2.1 billion in 2022, with Tbilisi attracting over 65% of these investments. Property prices in Tbilisi have risen by an average of 7-10% annually over the past five years, making it a promising market for capital gains. The rental yield is also impressive, averaging around 8-10% in central districts. These factors, along with Georgia’s liberal property ownership laws and attractive tax policies, are drawing in international buyers who see Tbilisi as a dynamic market for both immediate rental income and long-term appreciation.
According to Natia Odishvili, adviser at Arkan Property, these trends reflect Tbilisi’s potential as one of the region’s most dynamic real estate markets, with key features that make it appealing for both rental income and long-term growth.
- Favorable Investment Conditions
Georgia ranks highly for ease of doing business, with a simplified process for property purchases by foreigners, and no restrictions on foreign ownership of real estate. Furthermore, the country offers a relatively low property tax rate, enhancing the appeal for international buyers looking for profitable investments in an accessible and investor-friendly environment.
- Growing Tourism and Rental Market
Tbilisi is known for its blend of rich history, stunning landscapes, and modern culture, making it a popular destination among tourists and expats alike. The rise in tourism has fueled demand for short-term rental properties, particularly in central Tbilisi neighborhoods. Many investors see potential in the Airbnb and short-term rental market, allowing them to generate solid returns through both capital appreciation and rental income.
- Affordable Prices and High Return Potential
Compared to European cities, Tbilisi offers significantly lower property prices, which presents an affordable entry point for international investors. Despite the affordability, property values in Tbilisi have shown steady appreciation over recent years. This trend is expected to continue as the city grows in popularity, creating opportunities for long-term capital gains.
- Market Trends and Investment Hotspots
Key districts in Tbilisi such as Saburtalo, Vake, Dighomi and Old Tbilisi are particularly attractive due to their blend of historic charm, modern amenities, and proximity to business hubs. Investors have been drawn to these areas for both commercial and residential projects, as they cater to a growing middle class and a steady influx of expatriates.
- Future Outlook
Tbilisi’s real estate market is set for continued growth, supported by the government’s push to attract foreign investment and the country’s strategic location as a gateway between Europe and Asia. For investors seeking diversification, Tbilisi offers a dynamic, growing market with robust opportunities in both residential and commercial sectors.
Tbilisi presents a compelling opportunity for foreign real estate investors. Its favorable business environment, affordability, rising tourism demand, and high growth potential make it an appealing choice for those looking to invest in an emerging market with promising returns.
