Real Estate Prices Index

Details: Created: 13 September 2014

In September, sale prices for residential properties in Tbilisi declined significantly compared to the previous year (-8.6 %). In terms of area, Old Tbilisi continues to lead the price index, at 1,143 USD per m2 in September.

Starting in June, sale prices for residential property began to drop and stayed below the long-term trend. Rental prices have also declined in annual terms (-2.4%, compared to September 2013). The rental decline is not surprising, and is due mostly to the pronounced seasonal pattern in Tbilisi rental market prices. Typically rents slump in the summer as students start leaving the city and increase in September when students come back for the new academic year. (see Chart 1) Download the full report

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Details: Created: 13 May 2014

In May, sale and rental prices for residential property in Tbilisi were lower by 4.0% and 3.3% resectively than in the same month a year earlier.

The selling prices of residential property declined in May, both in monthly and annual terms. Despite this, the trend line on Chart 1 indicates a tendency towards an overall price increase since Feb. 2013.

Rent prices showed a decline in annual terms (3.3%, compared to May 2013), but the overall price trend remained stable on the rental market over the year, despite large seasonal fluctuations. Download the full report

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Real Estate Methodology

According to the best global practices, residential and commercial real estate price indices are calculated using several measures, namely the Laspeyres index or the Paasche index. Another popular measure, the Fisher real estate index is a combination of the two. These indices heavily depend on the available sample and do not take into account sample volatility across time (for example, the quality of purchased units in the sample may increase over time, which will be reflected in higher prices). One way of remedying this issue is to construct a standardized real estate unit in each time period (using a hedonic regression technique) and to use this unit to obtain quality-adjusted indices. The latter indices are called the Laspeyres hedonic imputation index and the Paasche hedonic imputation index (Handbook on Residential Property Price Indices, Eurostat Methodologies and Working Papers, 2013). Read More