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Georgia on Your Mind: 5 Reasons Why Georgia is the Next Big Thing in Real Estate Investment

Jun 14,2023 Read 0 min

We invite you to the world of Georgia, where an exciting real estate opportunity awaits. From a booming economy to affordable property prices, let’s explore why Georgia is emerging as the next big thing in real estate investment.

Reason 1: Georgia’s Thriving Economy and Investor-Friendly Environment

Growing GDP and Diverse Economy

Economic development and a business-friendly climate is the first reason that makes Georgia the ultimate real estate investment destination. It grew from ashes to become the fastest-growing economy in the region. Between 2010-2010, the country averaged a 4.8% GDP growth rate, with 10.5% in 2020.

Georgia’s economy is a well-rounded team, with different sectors playing essential roles. Services contribute 60% of the country’s GDP. Industries follow behind, making 20% of the economy, with agriculture holding 6%. Georgia’s stunning landscapes, rich culture, and delicious cuisine make the Tourism sector a significant force driving economic growth.

The country’s diverse sectors offer a variety of investment possibilities, drawing investors with the country’s economic stability and potential for long-term growth.

Source: Asian Development Bank. Asian Development Outlook 2023 (April 2023)

Business-Friendly Policies and Tax Incentives

Georgia has earned a place in the world’s top ten most business-friendly countries. It has implemented reforms and strategies to improve its business climate by strengthening the rule of law, lowering taxes, and reducing procedural challenges. Georgia also supports strategic sectors through available tax exemptions, subsidies, grants, and credits.

These factors increase demand for residential and commercial properties in Georgia. Tbilisi, Batumi, and Kutaisi are some of the hottest destinations, creating promising real estate investment opportunities.

Georgia’s booming economy and supportive policies are not the only reason to invest in real estate. The country also offers low prices and high returns for real estate enthusiasts.

Reason 2: Affordable Prices and High Returns

Value for Money

Despite the economic growth and increased popularity, property prices in Georgia are still low. Affordable prices allow investors to quickly find great deals in Georgia, with attractive options in undervalued areas or those with a high appreciation potential. As per Numbeo, the average price per square meter of an apartment in Tbilisi is $1,057.

The country’s rental market is also impressive, with an average rental yield of 8.6% and a rent-to-price ratio of 10.3% in Tbilisi. It allows investors to earn back the investment within the first ten years of renting the property. The rental yield is higher than the 6.1% global average, and Tbilisi’s rent-to-price ratio also turns heads compared to 3.9% in Europe. It allows investors to earn back the investment within the first ten years of renting the property.

Growing Rental Demand and High Occupancy

Thanks to its growing tourism industry, the country maintains strong rental demand. Its strategic location connecting Europe and Asia and its ease of doing business further increase the demand for commercial and residential property.

The country hosted over 9 million international visitors in 2019, an increase of 7% from the previous year. Many of these visitors prefer to rent over hotel stays, which creates profitable opportunities for foreigners owning properties in Georgia. The most popular destinations include Tbilisi, Batumi, and Kutaisi.

High occupancy rates are yet another advantage of the booming real estate market. Standing at 75%, renting a property all year round is common in Georgia ensuring steady income for investors throughout the year.

In addition to value for money and strong demand, the country also offers a variety of real estate niches and sectors to explore.

Reason 3: A Wide Range of Opportunities and Niches

Options for Different Investor Preferences and Goals

A variety of options for different preferences and goals is another reason Georgia is an attractive destination for real estate investors.

Urban or rural properties, luxury or budget options, and short-term or long-term rentals – are all available in this diverse market. Investors interested in urban real estate can check out Tbilisi’s unique districts. Being one of the cheapest capitals in the world, Tbilisis allows investors to buy their property in the city center for less than $1000 per square meter. Notable areas include Vake and Saburtalo, Old Town in the center, and Isani and Gldani in the suburbs.

For those that prefer rural real estate, Georgia’s countryside awaits. Some of the charming areas are Signaghi, Mestia, Kazbegi, and Borjomi. Luxury real estate is another promising sector, with the King David Residence, Alliance Palace, and world-class hotels. Budget options are also available – Fabrika Hostel and Rooms Hotel provide affordable and cozy properties.

Lucrative Opportunities in Tourism and Hospitality

Georgia’s real estate market is thriving in tourism and hospitality.

The country’s attractive climate, low cost of living, rich culture, and natural scenery make it a popular destination. Tourists, students, and retirees are all drawn to its unique character and potential. Such interest fuels the tourism industry, which has generated $3.5 billion from international tourist visits in 2022, with a 182.5 percent increase compared to 2021.

These figures make Georgia perfect for investing in the hospitality industry.  With vacation homes and short-term rental properties also hold excellent investment potential. As many students, expats, and professionals choose Georgia for living and working, long-term rentals also cater to growing demand.

Reason 4: Stable and Supportive Political and Legal System

Democratic Reforms and Anti-corruption Efforts

The country provides a political and legal system that supports foreign investors.

It has improved governance, upheld the rule of law, and invested in anti-corruption efforts. Transparency International even ranked Georgia 45th in the Corruption Perceptions Index in 2020. These reforms have created a safe and secure place for real estate investments.

The country’s property registration is quick and effortless, ranked as one of the best in the world. The government has simplified procedural challenges and reduced bureaucracy. These facts make it easy for investors to engage in business activities within the country.

Property Rights and Foreign Ownership

Georgia welcomes foreign investors with open arms and a supportive legal system. It has even incorporated provisions to protect foreign investments from legislative changes. With no restrictions on foreign participation (except owning agricultural land), investors can enjoy a variety of sectors in the country’s booming economy.

Investors can enjoy visa-free travel to many countries and incentives such as citizenship by investment. The government has also entered into investment treaties with close ties to partners worldwide.

Georgia not only offers legal and political stability but also has a strategic location and significant cultural appeal.

Reason 5: Strategic Location and Appealing Culture

Geographic Position and Connectivity

Situated at the crossroads of East and West, its geographic location makes Georgia a strategic hub for transport, trade, and infrastructure.

With access to the Black Sea, the country connects to other maritime markets and, with modern infrastructure, links to other regional and global markets.  Several major ports on the Black Sea coast and several international airports connect it to major destinations worldwide.

Thanks to the visa-free regime in many countries, it is easy for tourists and investors to visit and do business in Georgia. Its free trade agreements with partners (DCFTA, CISFTA) open doors to the rest of the world and give the country and its businesses access to over 2 billion consumers.

Charming History and Heritage

Georgia boasts a rich and enduring history spanning over 3,000 years.

Numerous cultural sites, such as churches, monasteries, fortresses, and museums, showcase its historical and cultural wealth. Georgia stands out with its distinctive alphabet, language, literature, music, dance, cuisine, and renowned winemaking tradition, all serving as a testament to its unique and innovative spirit. Moreover, Georgia is famous for its warm hospitality and friendly nature, extending a welcoming hand to visitors and residents alike.

The country’s rich history and traditions show Georgia’s resilience and determination to maintain its unique heritage. It has preserved a distinctive national identity over centuries, offering travelers a wealth of cultures to explore and experience.

Conclusion

This article explored why Georgia is emerging as the next big thing in real estate investment. From a booming economy to affordable property prices, we examined five key reasons that make Georgia destined to be the next hotspot.

We have seen how Georgia’s thriving economy, investor-friendly environment, a wide range of opportunities and niches, stable and supportive political and legal system, cultural and natural diversity, and strategic location and connectivity make it an attractive destination for investors looking for low prices and high returns.

Georgia is a country with great potential and charm. Here you can find ancient history, modern innovation, natural beauty and urban sophistication, hospitality, and diversity. Consider Georgia your next destination if you want a new and exciting opportunity to grow wealth through real estate. To maximize the benefits, consult agents or experts to help you find the best deals and opportunities in Georgia’s real estate market. Reinvet’s team of professionals will be happy to assist you in your journey to the world of Georgian real estate!

Sources:

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[11] Georgian National Tourism Administration. (n.d.). Home page. Retrieved from https://gnta.ge/

[12] Transparency International. (2021). Corruption Perceptions Index 2021: Global Highlights [Report]. Transparency International Portal. Retrieved from https://www.transparency.org/en/cpi/2021?gclid=CjwKCAjwsvujBhAXEiwA_UXnAJS9gKvTOx-KkMN7kGUGZ4MG7F2LxiiSfAJD983JGir6_J21F4G6ORoCswQQAvD_BwE

[13] World Bank Group and International Finance Corporation. (2013). Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises [Report]. World Bank Publications Portal. Retrieved from https://subnational.doingbusiness.org/en/data/exploretopics/registering-property/good-practices

[14] Privacy Shield Framework. (n.d.). Georgia: Openness to and Restrictions Upon Foreign Investment. Retrieved from https://www.privacyshield.gov/article?id=Georgia-Openness-To-and-Restrictions-Upon-Foreign-Investment

[15] Foreign Policy Research Institute. (2021). Strategic Connectivity in the Black Sea: A Focus on Georgia. Retrieved from https://www.fpri.org/article/2021/12/strategic-connectivity-in-the-black-sea-a-focus-on-georgia/

[16] Enterprise Georgia. (n.d.). Free Trade Regimes with Georgia: Overview and Factsheet. Retrieved from https://www.enterprisegeorgia.gov.ge/en/Free-Trade-Regimes

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