Since July 1, 2017, all entrepreneurs in Georgia, both natural and legal entities, have been obliged to indicate the price of their products and services, including real estate, in GEL.
The change was aimed at strengthening the position of the national currency and increasing transparency in the market. However, opinions differ on how much this decree has affected real estate prices.
“The price is still tied to the dollar”
Neli Goguadze, founder of the real estate agency Kibe.ge, notes that despite the obligation to indicate prices in GEL, the dollar remains the main measure of price in the market.
“In accordance with the law, we place all advertisements in GEL, but the owner of the apartment still calculates the final price in dollars. In practice, when a client appears, the agreement is often concluded at a different rate or amount. That is why it is difficult to say specifically whether prices have actually increased or not,” explains Goguadze.
He said that the number of apartments on the market for sale is currently high, but the number of active buyers has decreased, especially for old apartments.
“New constructions are more in demand, with good conditions, a wide range of choices and a clean legal status. It has been very difficult to sell old apartments, especially ‘Khrushchevs,’” he added.
“Larization has caused confusion in the market”
Nika Japaridze, director of the real estate listings platform Saqme.ge, says that after the regulation came into effect, some uncertainty has arisen in the market.
“Many people publish ads without understanding the obligation. Some people think that it is still possible to indicate the dollar. In addition, larization does apply to legal entities, but to individuals less so. As a result, today the price in one ad is in GEL, in another in USD, which has interested both the consumer and the market,” says Japaridze.
In his opinion, the introduction of a single currency standard would be better for everyone:
“If once and for all, all individuals and legal entities had to quote prices only in GEL, the market would become more transparent. Currently, despite the demand for GELization, in reality everyone still uses dollars to set prices.”
As for prices, Japaridze notes that there have been no sharp price fluctuations in recent years, although changes in the GEL exchange rate always have an impact:
“When the dollar rose sharply, for example, from 1.75 to 2.40, it was natural that the price of an apartment was also reflected. It became much more difficult for a buyer who has an income in GEL to pay the same amount. So, real prices seem unchanged, but purchasing power has decreased,” he explains.
“Prices have been stable in recent months”
Gvantsa Gujelashvili, public relations manager at real estate agency MyClient.ge, confirms that no radical changes have been observed in prices:
“The cost of an apartment has neither increased nor decreased sharply, neither in new nor in old buildings. However, against the backdrop of the dollar exchange rate increase, the buyer now has to pay more for the same real estate than even two weeks ago,” says Gujelashvili.
According to her, the market is in a phase of stability, although the development sector is still closely monitoring the exchange rate changes, since even small fluctuations affect the consumer’s decision.
🔍 In short
• Apartment prices are formally indicated in GEL, but in fact they still depend on the dollar;
• Demand for old apartments is decreasing, while new projects are the leaders in sales;
• Fluctuations in the GEL exchange rate affect buyers’ purchasing power, although no sharp changes in prices are observed.
