In Tbilisi, there is a bridge called “Bridge of Peace,” designed to connect Old Tbilisi with the new district. Today, Tbilisi serves as a bridge of peace for Russians, Ukrainians, and others looking for an escape. Georgia has become one of the middle grounds for those fleeing the Russia-Ukraine war. There has been a massive influx of Russians, Ukrainians, and other European nationals coming in, in addition to tourists and Georgians who resided in Russia moving back home. As many of these visitors wait to see what will happen with the war, they are signing 6-month rental contracts as opposed to the typical 1-year lease.
Such high demand and short-term contracts have contributed to a rental market that is unstable and skyrocketing because no one can predict the outcome of war and its long-term effects. Much of the market’s volatility depends on the war, how long will it last, and if people leave or stay when it’s over.
During COVID-19, rents dropped but given Georgia’s proximity to Russia and Ukraine, the war changed that dramatically. Availability is low—borderline non-existent—especially for highly requested apartments like 1 and 3 bedrooms. House rents also increased; apart from luxury homes, availability has always been low for houses. Vera and Vake are the most requested areas for long-term rentals, leaving them with limited availability.
Before, there was much availability where expats could view 2-3 apartments a day for weeks on end as opposed to now where there are only 3-4 options overall at most. 2-bedroom apartments have the highest availability of all the options. To find housing, it requires a great deal of flexibility and understanding the reality of the current situation. There is no time to linger on options because they can be rented in a matter of hours.
Real estate is very expensive in Georgia because demand has an immediate impact on housing prices. During lease renewals, some landlords are increasing rents for current tenants to match the demand, though many may not increase them as high.
There is demand for new construction of rental units, but the cost of building materials went up due to the production interruption from COVID-19 and now the war. It is a new world we live in now and though we hope rents will go back down, a decrease would likely only be seen for very expensive homes, but not any time soon.
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Lakeisha joined AIRINC in 2019 where she has fascinating role of conducting international cost of living and housing research.
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