Investing in Georgia real estate

[Don]

Does anyone have experience in investing in real estate in Georgia?
I have been there myself and visited a few hotel-apartment buildings such as:
https://nextgroup.ge/wyndham-residencehttps://eltbuilding.ge/en/https://alliancegroup.ge/en/project/2/Alliance-Palace/Project-Description/
What are the occupancy rates? Costs? How easy is it to hire/manage a local team?

I think it looks quite decent, and definitely, the country has been developing fast last few years and the trend might continue.
However, I understand that what is putting off the investors is the chance of conflict with Russia and political risk, or am I missing something?

 

[troubled soul]

Biggest drawback of hotel apartments investment in any country is annual service/maintanence/management charges which quite high. It will eat your profit.. if COVID type things happen. If no income generated,you are still liable to their charges... Which is quite High??

Better to buy regular apartment and give to property management company.

When you want to sell hotel apartments,, it is very hard compare to regular apartment. As resell market for this type of property is iliquid.

Some project give you guranteed return for some years.. it is bigger scam . They just inflated property price and give you your money in that period.. armature investors fell for it..

One more important things you have to consider that you do not have control over it in hotel apartments. If some repair work done, whatever charges they said you have to paid... Hotel apartments look good in paper.. reality it is trap. I am not against hotel apartments investment. Love it,'s no hassle investment option. It works for some people and make good profit. I consider it as high risk high returns category...

 

[fortunespeculator]

I can arrange for Georgian property/hotel/land/apartment/house

 

[hatsuri]

has anyone bought a property there?

 

[Meta]

Yep. Residential is renting out profitably with influx of Russians. Feel free to ask specific questions.

 

[hatsuri]

Can a EU Resident freely buy property in Georgia for cash?

Which is the best listing site to look for Real Estate in Georgia?

 

[Meta]

I paid with a bank transfer, but people were generally enthusiastic for cash deals. I guess it would not be a problem. As far as I get banks would be fine if you show up with a suitcase of cash and some source of funds documents.

I found myhome.ge and ss.ge to be the most useful.

 

[Don]

Can a EU Resident freely buy property in Georgia for cash?

Which is the best listing site to look for Real Estate in Georgia?

You can also get any number of crypto to GEL without issue and then buy with GEL.

 

[khinkali]

You can also get any number of crypto to GEL without issue and then buy with GEL.

People have gone to Public Service Hall with the seller and both lawyers, transferred the crypto and submitted the paperwork. Super-easy, so I'm told.

I don't know exactly how the "must be in GEL" thing works, something to do with the transaction must be recorded in GEL, but you can settle by USD, crypto or goats if you want to.

 

[backpacker]

has anyone bought a property there?

Many did. Typical Gloom, Boom, Doom cycle.
If you buy now you're somewhere at the very end of "Boom". Rental prices have already massively declined over the last two months. Prices of apartments per sqm still stable but new offers for sale are abundant which wasn't the case just a few months ago.
Moreover, many new developments are currently going online and the building frenzy continues. Developers know that if they can not sell their low-quality apartments now they will never be able to get rid of them.
So, wise investors are selling, not buying!

 

[khinkali]

If you buy now you're somewhere at the very end of "Boom".

I think that we should differentiate the Russia, Ukraine and Kazakhstan boom from the Arabian boom.

I am not into long term price predictions, but I would be concerned that with so much money pouring into the country and so much sudden demand for real estate, that the economy, real estate and especially the currency are at risk from outflows. It's not just about property devaluation, there is also the risk that the central bank can't hold the currency up as the tide goes out.

However, it does look like Middle Eastern families are liking Georgia. If enough folks from Saudi, UAE, etc. want to have a Summer home to escape the heat in a country that hasn't gone super-woke, then Georgia could continue to benefit.

If both things happen (that Russians leave with their $ and Arabs arrive with their $) along with the European problems, then the low end market will collapse. Yet the higher end could do well.

This would be no bad thing.

 

[backpacker]

There are definitely more Arabs coming to Georgia. However, that is not enough to keep the boom alive. The Arabs who come are still at the lower end of the affluent scale. Many stay in AirBnB, some invest. They know that they are not liked in GE (we both know very well how Georgians think about foreigners in general).
All-in-all these tourist Arabs are not enough to compensate for the sudden boom caused by the war. And this boom is now showing signs of slowing down.

I am not sure if Russian will run with their $. Even if they stay but no more fresh (or too little) money flows in, this economy + it's overvalued currency will collapse.
Georgia is a textbook example for a "Gloom, Boom, Doom" economy, sadly.

Regarding "low-end" real estate: Prices are retreating and this retreat goes up to the middle segment. Dirsi (white frame) is now on average $800.-/SQM and better middle class is easily available for $1'000.-/SQM. Add a $150.- and you get it with fully equipped bath and kitchen. All this was about 20% more just three months ago.
Rent prices are much more dramatic in it's decline.

Overall a positive development because prices got unaffordable for locals. Only very few people really profited form the governments open-door policy towards RU.

 

[troubled soul]

Anybody know the Portal for find property or directory of project who accept crypto ?

 

[Meta]

Anybody know the Portal for find property or directory of project who accept crypto ?

Hardly possible. Looking online it seems to be possible but in reality it is definitely not common. Sellers mostly want fiat. Lawyers and agents I talked to were unable to facilitate the deal like that and clearly did not have experience. But there are lots of crypto exchangers in Tbilisi and you are ok with cash.

 

[koohl]

Not bad, means you can have your pockets filled with cash and just go and buy some property! It opens some doors for some business.

 

[khinkali]

The Arabs who come are still at the lower end of the affluent scale. Many stay in AirBnB, some invest.

I get that you might well come across some low-end types, meanwhile up market hotels have shown a big increase in Middle Eastern guests in Summer. Also there seems to be an interest in buying second homes, to use in the Summer.

They know that they are not liked in GE (we both know very well how Georgians think about foreigners in general).

Not really. Border police are known to be quite suspicious based on nationality and appearance, but if you talk to hoteliers the Middle Eastern guests are preferable to the historical Russian and budget-flight Europeans. They bring their children, they (kind of) don't drink, they want to experience some culture and nature. They are not the ones shouting and vomiting in Dzveli Tbilisi at night. One big plus for them is that personal crime is so much lower than in Western European destinations. (though it would be nice to round up the people who force their undocumented children to beg aggressively and pickpocket in two main locations)

So, when it comes to "Investing in Georgia real estate", we don't know. There are legitimate concerns about the currency if the recent tide flows back out, and low-end property would likely plummet in that situation. But there are is interest from the Middle East and possibly in future the far East. Covid put a stop to Chinese visitors and we don't know if those plans will ever get back on track.

 

[backpacker]

I get that you might well come across some low-end types, meanwhile up market hotels have shown a big increase in Middle Eastern guests in Summer. Also there seems to be an interest in buying second homes, to use in the Summer.



Not really. Border police are known to be quite suspicious based on nationality and appearance, but if you talk to hoteliers the Middle Eastern guests are preferable to the historical Russian and budget-flight Europeans. They bring their children, they (kind of) don't drink, they want to experience some culture and nature. They are not the ones shouting and vomiting in Dzveli Tbilisi at night. One big plus for them is that personal crime is so much lower than in Western European destinations. (though it would be nice to round up the people who force their undocumented children to beg aggressively and pickpocket in two main locations)

So, when it comes to "Investing in Georgia real estate", we don't know. There are legitimate concerns about the currency if the recent tide flows back out, and low-end property would likely plummet in that situation. But there are is interest from the Middle East and possibly in future the far East. Covid put a stop to Chinese visitors and we don't know if those plans will ever get back on track.

Well, Middle Eastern guests who stay at The Biltmore are certainly always welcome. But of these only a tiny amount is interested in buying. They know that built quality is abysmal.
The others are in Agmashenebeli and are all but welcome. Most of them are very low level people who run some dubious coffeeshops to hide even more dubious activities.

Crime rate in Tbilisi is certainly lower than in Western European big cities.
But high class Arabs usually go to Lac Léman, Côte d'Azur or Riviera dei Fiori - regions that do not have any crime at all and are certainly more attractive than Tbilisi.

The Chinese are a different matter. It was mostly a business (Hualing) with many other projects (Zestafoni tunnel) that brought them here.
I think that is over. They are now more careful after these dreadful experiences and the overall policy of today's China is anyway to keep money within their borders.

Anyway, let's wait and see what happens. It is easy to stay safe with regards to negative developments in GE - nobody is forced to invest locally.

 

[cryptofriendly]

There is also no danger of a second refugee wave coming from Taiwan, in case China steps up their game some day.
Georgian immigration doesn't let any Taiwanese enter Georgia, even for touristic purpose.

If there is any sign of trouble in Abkhazia or the other regions near Russia in the future, all that Russians gonna head out, empty their Georgian bank accounts, and leave back empty apartments.

 

[backpacker]

when it comes to "Investing in Georgia real estate", we don't know. There are legitimate concerns about the currency if the recent tide flows back out, and low-end property would likely plummet in that situation.

Out of curiosity: Are you still renting or did you engage in the local real estate buying frenzy?

There is also no danger of a second refugee wave coming from Taiwan, in case China steps up their game some day.
Georgian immigration doesn't let any Taiwanese enter Georgia, even for touristic purpose.

If there is any sign of trouble in Abkhazia or the other regions near Russia in the future, all that Russians gonna head out, empty their Georgian bank accounts, and leave back empty apartments.

Taiwanese would naturally look for other East Asian nations. The Philippines is quite a favorite due to many having fled there during the Kuomintang.

Anyway, I fully agree that Georgia walks on a tight rope and future return on invest is not exactly promising. There are definitely safer places to invest with better opportunities.

 

[khinkali]

Out of curiosity: Are you still renting or did you engage in the local real estate buying frenzy?

I rent. My future will depend on crypto issues. GE works for me now, but I am yet to decide the future.

Personally I wouldn't invest in GE property at this time, for the reasons I gave. That doesn't mean I have a 100% prediction of a slump, there are other reasons I mentioned that could mitigate or even outweigh the likely turning of the RU/KZ/UA tide.

I am totally with @azb1 about the hotel serviced apartments being a bad bet. Partly because with all the construction, it seems likely that the 2019 undersupply will turn into a 2024 oversupply and the liquidity could fall like a stone.