17 December 2007


History and its impact make Tbilisi to a unique field of investigation for a variety of metropolitan problems and questions. The tension between economic and political interest and both the impact of the Soviet past and recent increase of corruption make the capital of Georgia appear in an interesting light. After many years of economic depression, the city developed slowly but steadily to an "active" capital of the country. After the end of the Soviet Union, most of all the former CIS countries were affected by poverty and political isolation. During the 90s the city suffered from extremely high unemployment, emigration and shrinkage. In the last years a reversal trend can be noted. Foreign investors have discovered the town, trade begins to grow dramatically. Tbilisi gains population again. While more and more European cities are affected by shrinkage, it seems as though Tbilisi is now trying to fix its literally rusted infrastructures. The time after the apocalypse has begun.

This rapid growth is marked by the lack of an overall strategy and a missing large-scale development plan. Institutionalized monitoring is simply not existing. The property market fills the longterm building-gaps again. New infrastructures emerge, while the old ones tumbledown at the same time. Cities like Shanghai go to great lengths to keep everything controlled and organized, Tbilisi lets itself be taken over by self-organisation.

Tbilisi post-apocalyptic.

Georgian real estate business in general and the one in Tbilisi in particular have more or less stabilized in the last five years. The prices have doubled and the demand for properties is much higher than supply.
While the economic descent of Georgia in the early 90's, building activity got postponed and construction sites rotted. People tried to sell their property to use the proceeds for a better life somewhere else. Since the turn of the millennium, however, this situation appears to be stabilizing. Many people, particularly those employed in international companies, are now in a position to buy land and real estate. At the same time economic refugees from the 90's return
to Georgia and are in the position to invest. Recently billboards around the city as well as the official statistics indicate a huge construction boom. According to these numbers, the expenditure in the construction sector doubled in the years from 2000 to 2004 to 370.4 million lari (200 million US $). From 2004 to 2005 they increased to 606.2 million lari (330 million US $). In the same period 800 projects were under construction, 62% residential buildings.
In 2000 the price per square meter was less than $ 250, now it is between 800 $ and 900 $. In prestigious elite districts prizes go up to $ 1500. Apartments and office space are mostly sold long before completion of the building.

This makes Tbilisi an efficient place for large scale investments and developments.
The Center Point Group, for example, founded in 1999, has a market share of 75%, and sees himself as the leader in Tbilisi`s real estate market. In this position they can choose their customers. while only those with regulated and stable income are considered to buy or rent space. The subsistence level in Georgia is around 200 lari (110 $) per month, but at least twice is needed to be credit worthy.
The Center Point Group is cooperating for some time with the TBC-Bank, the market leader in the Georgian Chen banking sector. Together they award 20-year mortgage loans with 13-17% annual interest. The real estate group Arci also started a cooperation with the Bank of Georgia, the second largest bank in the country. They sell on credit with 16% annual interest. about 70% of new homes in Tbilisi are “'funded” in this manner.

Live webcam of building site here