Tbilisi's residential real estate market demonstrated robust growth in July 2026, with sales volume surging by 24% year-on-year according to data released by TBC Capital. This strong performance reflects a broader expansion in Georgia's capital property market during the first half of the year, signaling continued investor interest and robust market activity despite broader economic considerations.
Market Volume and Sales Activity
According to TBC Capital's monthly market review, the accumulated sales volume for the period from January through July 2026 reached $2.37 billion, representing a 24% increase compared to the same seven-month period in 2025. In July alone, apartment sales volume totaled $395 million, maintaining the year-over-year growth rate of 24%. The volume of transactions was driven by both secondary market activity and ongoing interest from buyers seeking residential properties in the capital.
Transaction numbers further confirm the strength of the market. In July, a total of 4,409 apartments were sold in Tbilisi, exceeding the previous year's July figure by 22%. Over the full seven-month period, 26,772 properties were sold, reflecting a 20% increase in the number of transactions compared to the corresponding period of 2025. The secondary market—sales of existing apartments—emerged as the key driver of this sustained annual growth.
Price Dynamics and Market Drivers
Notably, the significant sales volume growth was driven primarily by an increase in the number of properties sold rather than sharp price appreciation. Over the seven-month period, the average apartment sale price stood at $1,348 per square meter, which represents only a 4% increase compared to the same period last year. This measured price growth suggests that expanded transaction volume, rather than speculative price surges, has characterized the market's expansion.
Potential market supply, measured by residential floor space under issued building permits, increased modestly by 1% during this period, reaching approximately 711,000 square meters. This modest growth in permitted construction relative to the stronger sales activity may indicate increased buyer demand relative to available new residential inventory.
Construction Costs Rise Amid Labor and Transportation Pressures
While the sales market expanded, construction costs moved upward. According to the National Statistics Office of Georgia (Geostat), the construction cost index rose by 0.8% in July 2026 compared to June, and by 4.3% in annual terms compared to July 2025. The monthly increase was significantly influenced by a 6.4% rise in the average monthly nominal wages of construction workers during the same period, reflecting growing labor costs in the sector.
On an annual basis, construction cost inflation was driven substantially by price increases in key input categories:
- Transportation, fuel, and electricity costs increased by 15.2% year-over-year, representing the largest cost pressure on builders
- Combined with wage pressures, these factors pushed the broader construction cost index higher despite relatively moderate overall inflation
The longer-term trend reveals significant cumulative cost growth: since February 2022, the construction cost index has increased by 30.3%, substantially outpacing general price inflation and reflecting the structural challenges facing the construction industry through the post-pandemic period and beyond. These rising construction costs may eventually influence new apartment pricing and developer profitability in coming months.