Published on and written by Cyril Jarnias
Tbilisi has established itself within a few years as one of the most dynamic real estate markets in Eastern Europe. The capital of Georgia, an economic and cultural crossroads of the Caucasus, the city combines still-affordable prices, favorable taxation, ease of purchase for foreigners, and high rental yields, particularly in short-term rentals. But behind the image of an El Dorado, the market has become more sophisticated, more segmented, and simply “buying anything anywhere” is no longer enough.
To invest in Tbilisi real estate, it is essential to identify real opportunities and areas to prioritize based on local data and trends. A precise understanding of how taxation works and the main risks to monitor is also indispensable.
A Strongly Growing But Maturing Market
The Tbilisi residential market has seen spectacular growth since the pandemic. The volume of the residential real estate market in Georgia reached $4.3 billion in 2024, with Tbilisi concentrating about 72% of this activity. After a collapse in 2020 (–23.5%), the following years were marked by double-digit increases: +44.5% in 2021, +38.1% in 2022, then again +8.7% in 2023 and +8.6% in 2024.
The residential price index jumped 57.6% in the capital between 2020 and the first quarter of 2025.
The market is no longer in a phase of speculative bubble but rather in a “top-of-cycle” stabilization phase: still sustained growth, but with clear disparities between segments, a “flight to quality” favoring modern buildings, and a polarization between premium products and budget housing. Sales remain high – nearly 39,600 apartments sold in 2024, close to the record of 42,300 in 2022 – but the growth in transactions is starting to slow, with, for example, a slight 1% decline in the first quarter of 2025.
This combination of a robust market, prices still low compared to European metropolises, and a pro-business environment makes Tbilisi a credible destination for diversifying an international real estate portfolio.
A Legal Framework Very Open to Foreign Investors
One of Georgia’s major assets is the legal simplicity for non-residents. A foreigner can buy an apartment or commercial premises in Tbilisi under exactly the same conditions as a Georgian citizen. There is no obligation to involve a local partner or to reside on site.
A foreign individual cannot acquire a plot classified as agricultural land in Georgia, even if a house is built on it. This restriction also applies to certain sectors on the outskirts of Tbilisi. On the other hand, the acquisition of non-agricultural building land, apartments, and commercial buildings is permitted.
The purchase is regulated by a national land registry, digitized and reputed to be transparent. Each property has a unique cadastral code and its entire legal history (successive owners, mortgages, seizures, easements) is recorded in a “Property Extract.” Property registration is done with the National Agency of Public Registry, via the Public Service Halls, typically in 1 to 4 days, for a cost between 50 and 200 GEL depending on the desired speed.
For an international investor, it is possible to handle everything remotely via a power of attorney, including notarized signatures, which greatly facilitates market access.
Real Estate Taxation: A Very Competitive Environment
One of the most powerful arguments in favor of real estate investment in Tbilisi remains the tax regime, designed to attract capital and residents.
Annual Property Tax: Capped and Variable
The annual property tax on residential properties does not exceed 1% of the market value of the property. In reality, it is often lower because its effective rate depends on the household’s annual income:
– below 40,000 GEL annual income: total exemption,
– between 40,000 and 100,000 GEL: rate between 0.05% and 0.2%,
– above 100,000 GEL: between 0.8% and 1%.
The municipality (e.g., Tbilisi) sets the precise rate within the legal ranges. Declarations must be filed by November 1st and the tax paid by November 15th. Foreign owners must obtain a Georgian tax identification number. Important: in the absence of a declaration, the administration assumes an income above 100,000 GEL and applies the maximum rate, highlighting the importance of perfect compliance.
Real Estate Capital Gains: Exemption After Two Years
Georgia applies a very attractive regime on real estate capital gains. If you sell a property held for more than two years, the capital gain is tax-exempt. In case of sale before this period, a 5% rate is applied to the net profit. Renovation expenses can be added to the acquisition price to reduce the taxable base.
Again, for off-plan properties, the starting point of the two years corresponds to the moment when the owner is officially registered in the registry for the delivered property.
Rental Income: 5% on Residential
Rental income is another key dimension of Georgia’s attractiveness. A landlord who officially declares their residential rental activity can opt for a simplified regime: 5% tax on gross rents, with no possibility to deduct expenses. Otherwise, net income is taxed at the standard rate of 20%, with deductions for expenses.
Annual rental income threshold beyond which a property owner in Georgia must register for VAT.
The combination of a reduced 5% tax on residential, no stamp duty on purchase, capital gains exemption after two years, and a moderate property tax makes Tbilisi’s real estate taxation competitive compared to most European capitals.
Residency by Investment
Real estate does not automatically lead to citizenship, but can serve as a basis for a residence permit:
– a real estate investment of at least $100,000 allows applying for a temporary residence permit (up to 5 years, renewable),
– a minimum investment of $300,000 (including real estate) grants access to a 5-year “investor” residence permit, potentially convertible later into permanent residence.
The property value must be confirmed by a certified appraiser and the investment level must be maintained to continue benefiting from the status.
Price and Yield Overview: Where Are the Best Risk/Reward Ratios?
Prices in Tbilisi remain low compared to Paris, Berlin, or even Istanbul, but they have increased significantly. The recent evolution can be read as follows:
| Year | Estimated Average Price per m² in Tbilisi (USD) | Approximate Annual Variation |
|---|---|---|
| 2020 | ~850 | — |
| 2021 | ~900 | +6% |
| 2022 | ~1,050 | +15% |
| 2023 | ~1,200 | +14% |
| 2024 | ~1,350 | +12% |
| 2025* | 1,500–1,600 (projection) | +10–15% |
Projection based on price increase forecasts for 2025.
In April 2025, data revealed that average real estate prices masked significant differences between neighborhoods within the same city or region. For instance, some neighborhoods could display prices well above the average, while others remained significantly below, illustrating the heterogeneity of the market within the same territory.
| Tbilisi District | Average Price per m² (USD) |
|---|---|
| Mtatsminda | ~2,900 |
| Vake | ~2,544 |
| Chughureti | ~1,766 |
| Saburtalo | ~1,558 |
| Krtsanisi | ~1,499 |
| Isani | ~1,393 |
| Didube | ~1,359 |
| Nadzaladevi | ~1,169 |
| Samgori | ~1,070 |
| Didi Dighomi | ~1,051 |
| Gldani | ~1,035 |
| Vashlijvari | ~1,034 |
Gross rental yields, meanwhile, generally range between 6% and 10% per year depending on sources and periods, with a peak average of 10.6% recorded in May 2024. In practice, figures vary significantly from one neighborhood and rental format to another.
Long-Term or Short-Term Rental: Which Model to Choose?
Recent data confirms that both models remain profitable, but with different risk profiles.
For long-term rentals (contracts of 6 months or more), the gross yields observed in Tbilisi ranged between 6% and 8% in 2024. Average rents were around $9.5 to $12 per m² depending on the month and neighborhood, with a slight downward trend in 2024 and stabilization expected around $9–$10/m² in 2025.
A typical host can generate up to $12,000 per year with a short-term rental.
Net, after management fees (often 15–25% of rents for a professional manager), maintenance, vacancy periods, and taxes, yields are reduced by 1.5 to 2 percentage points compared to gross.
Major Neighborhood Profiles: From Luxury to High-Yield Periphery
The choice of district is probably the most structuring decision for an investor. Tbilisi is divided into 10 administrative districts, themselves composed of countless micro-neighborhoods with very different profiles. Here are the main categories of areas, viewed from an investment angle.
Vake and Vera: Prestige, Stability, Moderate Yield
Vake is generally considered the most prestigious residential neighborhood in Tbilisi. It is home to embassies, international schools, parks (Vake Park, Mziuri), high-end boutiques, and modern luxury buildings. Vera, nestled between Vake and Rustaveli, adds a trendy touch to this prestige: cafes, wine bars, concept stores, co-working spaces.
Prices here are among the highest in the city. In new developments, Vake often exceeds $1,800–$2,500 per m² and can climb beyond $3,000 per m² for flagship projects. Rental yields are logically compressed: around 5–6% on average, sometimes slightly more for very well-located small units.
These neighborhoods suit capital preservation strategies, luxury housing for expatriates and diplomats, or “lifestyle” purchases for personal use. They offer good liquidity on resale and steady value growth, but they are not the top performers in terms of cash flow.
Mtatsminda and Old Town: Tourism, High Appreciation, Risk of Saturation
Mtatsminda, perched on the hill overlooking the center, and the Old Town (Sololaki, Kala, Abanotubani…) constitute the historic and tourist heart of Tbilisi. 19th-century architecture, cobblestone alleys, sulfur baths, Narikala Fortress, and the funicular: everything attracts travelers here.
Annual occupancy rate that can be achieved by short-term rentals in the most sought-after streets.
But these areas already suffer from Airbnb supply saturation. Part of the stock consists of old buildings requiring costly renovations, subject to heritage constraints, and sometimes more vulnerable to earthquakes or pollution. For an investor, this is a segment with high potential but also higher risk, where a strict selection of properties and a fine analysis of competition are essential.
Saburtalo: Driver of Demand and Balanced Yield
Saburtalo, a large modern residential district, combines universities, medical centers, offices, shopping malls, and dense metro access. It is today one of the most liquid markets: it accounted for about 23% of new residential construction permits in 2024 and remains a leader in transaction volume.
Prices here revolve around $1,500–$1,600 per m² on average for new builds, with lower ranges for older buildings and higher ones for premium complexes. Rental yields are attractive without being extreme: 6–9% depending on the property type, with sustained demand driven by students, young IT professionals, and families.
For an investor seeking a balance between yield, appreciation potential, and resale liquidity, Saburtalo is a natural choice, especially for a first purchase also aiming for a residence permit (a 50–60 m² unit typically negotiates between $80,000 and $120,000 depending on the standard).
Didi Dighomi, Gldani, Samgori: Family-Oriented Periphery with High Yield
On the periphery, several districts are experiencing real momentum, driven by urbanization and infrastructure improvements.
The Didi Dighomi neighborhood, northwest of Tbilisi, perfectly illustrates the new construction dynamic. It concentrates a very large share of new projects, with 18% of residential construction permits issued in 2024. The sector’s attractiveness is explained by cheaper land, enabling the development of large complexes including schools, clinics, shopping centers, and parks. Prices per square meter remain modest for the capital, around $1,050, and gross rental yields are attractive, reaching 7 to 10%, or even exceeding 10% for studios.
Gldani and Samgori follow a comparable trajectory: old popular neighborhoods undergoing redevelopment, connected by the metro, characterized by low prices (around $1,030–$1,070 per m²) and gross yields of 7–9%. They attract a clientele of families and young workers seeking affordable space.
These districts are well-suited for yield-oriented and long-term appreciation strategies, with a more social risk profile (pressure on housing affordability, sometimes insufficient infrastructure risks) but strong potential for revaluation over time.
Isani, Avlabari, Ortachala, Chugureti: Transition Belts and Gentrification
Around the historic center, several areas are experiencing accelerated gentrification:
– Isani, to the east, combines metro access, shopping malls, and large new residential projects. Prices here are still relatively low compared to the center (about $1,400 per m²) with much more affordable pockets ($500–$700 per m² in some micro-neighborhoods) and yields of 7–9%. Sales growth recently surged here (+85% of primary sales at one point), a sign of growing interest.
Facing the Old Town, this neighborhood offers an affordable alternative with strong tourism and capital gains potential.
Price per m² ranging from $800 to $1,400, representing an interesting entry opportunity.
Reported annual rental yields between 7% and 10%.
Popular destination for tourists from Russia and the Middle East.
– Ortachala, south of the Old Town, benefits from its proximity to tourist areas while remaining more residential and greener, with prices lower than Mtatsminda or Chugureti. It is a good budget entry point for those targeting a mix of long-term + seasonal rental.
– Chugureti (and Marjanishvili/Aghmashenebeli) recorded the highest price increase in 2025 (+28.3% year-over-year). A former industrial and multicultural neighborhood, it has transformed into an artistic and trendy area, with strong demand from digital nomads and young creatives. Gross yields here hover around 6–9%.
These gentrification belts offer a good compromise between rental orientation and capital appreciation, with the classic risks of transitioning markets (price volatility, ongoing projects, construction nuisance).
Krtsanisi, Bagebi, Embassy Neighborhoods: Premium Residential
Krtsanisi, Bagebi, and some sectors near the lakes (Lisi, Turtle Lake) are increasingly hosting modern high-end projects, villas, and secure gated residences with open views and large green spaces. Krtsanisi is home to numerous embassies, while Bagebi, near Vake, offers a more “suburban” feel while remaining close to central areas.
Prices are high for the local market, in a range comparable to Vake for premium products. Gross rental yield is generally moderate (often 5–7%), but these neighborhoods attract a solvent clientele (diplomats, expatriates, affluent families) and aim more for preservation of patrimonial value.
Demand Structure and Tenant Profiles
Understanding who rents in Tbilisi is crucial to orienting your project. Demand is driven first by Georgian residents (about 85% of transactions), but international flows play an important role in the rental market.
Among foreign tenants and buyers, we find:
Main categories of buyers, national and international, in the real estate market of the Georgian capital.
Russians and Israelis each represent about 4% of acquisitions in Tbilisi, with a massive presence of foreign capital on the coast (90% of purchases in Batumi in 2024).
Citizens of the EU and the Middle East drawn by visa facilities (up to one year visa-free), light taxation, and yield opportunities.
A growing population of over 34,000 people registered in early 2025, favoring central and semi-central neighborhoods near cafes, co-working spaces, and metro stations.
Particularly concentrated in neighborhoods like Saburtalo, Didube, Gldani, or Isani, close to universities and employment hubs.
In central and tourist areas, rental demand is divided between:
– European tourists (strong presence around Mtatsminda, Sololaki, Rustaveli),
– tourists from Russia and the Middle East (particularly visible in Avlabari, Marjanishvili, Vake),
– long-term expatriates (Vake, Vera, Saburtalo, Krtsanisi).
In the periphery, demand is more domestic, family-oriented, very sensitive to size, price per m², the presence of parks, schools, and shopping centers.
New Market vs. Old Market: An Acknowledged “Flight to Quality”
2024–2025 statistics clearly show the growing preference for new or recent buildings. In 2024, sales of new apartments grew by about 12%, while those of older homes remained stable or declined. In the first quarter of 2025, prices for new apartments increased by 11.5% year-over-year, while transactions remained overall stable.
At the same time, the share of housing sales below $1,000 per m² collapsed, falling from 66% in 2023 to 48% in March 2025. Rising construction costs (labor +9%, equipment +3.7%) make offering very cheap housing more difficult, increasing the risk of a structural shortage of affordable housing.
The tension between limited supply and growing demand for modern comfort (insulation, fast elevators, parking, green spaces, services) should maintain the momentum of large new complexes, particularly in the Saburtalo, Didi Dighomi, Samgori, and Isani neighborhoods.
For an investor, new builds present several advantages:
– warranties and compliance with recent standards,
– possibilities to buy off-plan with increases of 20–35% between launch and delivery on some projects,
– widespread use of staged payment plans (up to 48 months interest-free with some developers).
But they also carry specific risks: delivery delays, variable construction quality, dependence on the developer’s solvency.
Purchase Process and Financing: What to Anticipate
The acquisition process in Tbilisi follows a few relatively standardized steps, but due diligence is crucial given a largely unregulated real estate agent sector.
In practice, the investor:
To acquire a property in Georgia, an investor must first identify a property through local agencies, specialized platforms, or developers. They must then appoint a lawyer to verify the registry extract, the absence of debts, the plot’s status compliance, the consistency of the cadastral plan, and construction permits for new builds. After signing a bilingual preliminary agreement (Georgian-English or Russian), payment is made in GEL (the official currency), although prices are often quoted in dollars. The purchase is finalized by registering the title transfer with the public registry.
Additional costs – excluding agency commission – remain limited, often less than 3–5% of the purchase price (registry fees, notary, lawyer, possible appraisal). Legal fees are often between $500 and $1,000 depending on the scope of services.
Regarding financing, foreigners can access mortgage loans from the two major local banks (Bank of Georgia, TBC), but conditions are strict: minimum down payment of around 30%, shorter term than for residents (often 10 years maximum), interest rates around 6% (in dollars) or 11% (in GEL). Many investors prefer to either pay cash or take advantage of payment facilities offered by developers (initial deposit of 10–30%, then interest-free installments over 12 to 48 months).
Yield, Risk, and Investment Strategies
With average gross yields of 7–10% and price increases of 8–12% per year in recent years, Tbilisi can offer a very interesting return on investment – but only if the strategy is well calibrated.
An investor can roughly choose between three main profiles:
– rental yield strategy: target neighborhoods like Didi Dighomi, Gldani, Samgori, Isani, or certain parts of Saburtalo and Didube, with well-optimized small units close to the metro. The objective: 8–10% gross in long-term rental, or more on a mix of long/short term.
To increase your capital, position yourself on new projects under construction in neighborhoods like Saburtalo, Didi Dighomi, Chugureti, or in areas undergoing gentrification like Avlabari, Isani, and Ortachala. An off-plan purchase, with a good choice of project and timing, can generate a capital gain of 20 to 35% upon delivery.
– premium / patrimonial diversification strategy: turn to Vake, Vera, Krtsanisi, or certain segments of Mtatsminda and the Old Town, prioritizing legal security, construction quality, prestige of address, and liquidity. Yields will be lower (5–7%), but the asset value is based on scarce land.
The key is to cross-reference these objectives with your investment horizon, risk tolerance, management constraints (presence or not on site), and, if applicable, your tax residency or visa project.
Risks Not to Underestimate
The very positive image of Georgia for investors should not obscure a series of very real risks.
The first lies in the very loose regulation of the real estate agent profession. Anyone can set themselves up as a “broker” and accounts of fake listings, prices inflated for foreigners, or inaccurate information on properties are common. It is imperative to work with recommended intermediaries and to systematically have titles checked by an independent lawyer.
A large part of the residential stock (about 81%) was built before 1991, which can lead to infrastructure problems (parking, elevator, insulation, sewers) and seismic vulnerability in some neighborhoods due to sometimes outdated technical standards.
The third lies in emerging imbalances: the scarcity of very affordable housing, the decline in construction permits in certain segments, and the possible entry of the market into a phase of “structural undersupply” which, while favorable to prices, could accentuate social tensions and lead to future regulations, especially on short-term rentals.
Finally, the macroeconomic context – volatile currency, dependence on tourism, geopolitical tensions in the region – adds a layer of country risk that must be integrated into one’s overall allocation.
How to Approach a Project in Tbilisi Concretely?
For a French-speaking investor considering getting started, a structured approach can make the difference.
The first step is to clarify the target tenant profile: students and young professionals? Georgian families? European tourists? digital nomads? Each segment corresponds to typical neighborhoods, optimal sizes (studios, 1 bedroom, 2 bedrooms), an expected level of finish, and a specific management mode.
To identify promising neighborhoods, one must analyze and compare their fundamentals: average price per square meter, metro access, quality of schools, accessibility to downtown, planned infrastructure projects, and density of competing rental supply. Currently, the neighborhoods of Saburtalo, Didi Dighomi, Isani, Avlabari, and Chughureti offer the best compromises between rental yield and capital gains potential.
The third is to select a type of asset (new, recent, old needing renovation) and a budget range, keeping in mind that:
– an apartment in Tbilisi can still be bought starting from $60,000,
– a good quality 50 m² in Saburtalo will often be around $80,000–$120,000,
– a premium product in Vake or Mtatsminda can quickly rise beyond $150,000–$250,000.
The fourth, finally, is to surround the project with local professionals (lawyer, tax specialist, property manager) who know the market’s subtleties, the actual vacancy rates, and optimized tax structures.
Conclusion: Tbilisi, A Unique Place in the European Real Estate Landscape
Investing in real estate in the city of Tbilisi means entering a market already in full swing but which has not yet reached the price levels of major European capitals. Yields remain high, taxation is one of the most favorable in the region, entry barriers for foreigners are low, and demographic and tourism dynamics continue to support demand.
At the same time, the period where one could buy “at random” hoping to win on all fronts is over. The market has professionalized, competition has increased in the short-term segment, and performance gaps between neighborhoods and segments have widened.
Real Estate Expert
For investors willing to do their homework – detailed district analysis, rigorous project selection, good understanding of taxation, and use of independent professionals – Tbilisi still offers a rare window in Europe: that of a growing capital, with real estate that can generate both a significant income stream and solid capital appreciation in the medium term.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
