Georgia's real estate market in 2026 is undergoing serious structural changes, and investors increasingly face a choice between the capital and the seaside. According to analytical agency TBC Capital, the average price per square meter in Tbilisi has reached $1,200, while in Batumi this figure remains at $1,100. However, the price per square meter is only one variable in the equation of investment returns. A much more important factor is the level of residential property occupancy and the structure of property management expenses.
Tbilisi demonstrates stable year-round demand for residential space, which is explained by its role as Georgia's administrative, economic, and educational center. The capital constantly receives foreign specialists, local university students, and entrepreneurs, creating a sustainable base of potential tenants throughout the year. Average occupancy of residential properties in Tbilisi reaches 80-85%, which provides predictable and regular income without sharp seasonal fluctuations. Investors in the capital can expect returns of 8% to 10% per annum, depending on the district and type of housing.
Tbilisi's market offers several attractive investment venues with different return profiles. The Saburtalo district is oriented toward long-term rentals to expatriates and entrepreneurs and provides returns of 8-9% per annum with an entry budget starting from $75,000. Isani specializes in renting apartments to foreign students and offers higher returns of 9-10% per annum, but with a lower entry threshold of $60,000. Vake attracts premium-class investors, offering high-quality housing for long-term rental with returns of 6-7% per annum, but requires significant initial capital—from $120,000.
Batumi, with its developed tourist infrastructure and seaside location, has long been positioned as a quick way to earn money on real estate with promises of high returns. Developers and builders actively promote the idea that a seaside apartment can generate up to $100 per day during peak tourist season. However, these calculations are based on a critically important oversight: the peak season in Batumi lasts only from mid-June to the end of August—just three months a year.
The remaining nine months, Batumi faces a sharp exodus of tourists and a corresponding drop in demand for short-term rentals. From October to April, average occupancy of apartment hotels falls to 20-30%, forcing owners to seek alternative sources of income. To avoid complete vacancy of premises, owners are forced to rent studios on a monthly basis at rates of $200-250 per month, which barely covers utility payments and brings no profit. According to an analytical report by Galt & Taggart, market saturation of Batumi with identical studios in large apartment hotel complexes has led to fierce price competition, forcing investors to make concessions on price.
The main problem for investors in Batumi becomes operational expenses and commissions, which consume a significant portion of potential profits. Management companies in apartment hotel complexes take from 30% to 40% of total income for their services, including cleaning, minor repairs, and property marketing. Real examples show that the purchase of a typical studio on the first line for $60,000 results in net returns of only 4-5% per annum. An investor counting on 12% per annum when buying an apartment for $65,000 faces eight months of vacancy during the off-season and total actual returns not exceeding 3%.
In Tbilisi, the structure of expenses differs significantly for the better, especially when renting property long-term. Tenant search agent services typically cost half the value of one month's rent, and utility payments are completely transferred to the tenants. Overall expenses for managing long-term housing in the capital amount to only 10-15% of income, including rental tax and periodic cosmetic repairs. This is two to three times less than in Batumi and provides the investor with real net returns without unpleasant surprises in the form of unexpected vacancies.
The mistake many investors make is that they choose a city based on emotions from their own vacation, forgetting that what matters most to a tenant is transportation accessibility and the availability of jobs in the city, not a beautiful view from the window. Batumi remains attractive to tourists, but is insufficiently developed as an employment center to provide year-round demand for housing. Calculations based on real figures show that stable Tbilisi with its predictable 8-9% per annum often becomes a more profitable investment than Batumi with its promised but unachievable double-digit returns.