Batumi real estate market is the second largest in Georgia after Tbilisi significantly contributing to the economic activity in the region.

At the same time real estate market in Batumi largely depends on tourism since significant portion of flats (i.e. 64 %) is bought by citizens of foreign countries once more proved by the research conducted by Cushman and Wakefield.

Since Covid-19 pandemics most adversely affected tourism sector, no surprise that these negative consequences were directly reflected on a construction sector in Batumi. 

Delay of construction process

Declaration of state of emergency significantly delayed the construction process in Batumi for most of the construction and development companies lasting from 20 days up to 2 months. Currently, the majority of them have resumed the process, however some of them were not back to normal in May.

Citron Group was among those developer and construction companies who has managed to sustain stability and resume the normal pace of work pretty quickly. As a result, the construction of Citron Residence Chakvi is almost completed, while construction of Citron Residence Batumi is actively proceeding adhering to deadlines.

Decrease of sales

According to the research undertaken by Cushman and Wakefield the dynamics of sales in the first quarter of 2020 was positive showing 11 % increase in sales compared to the same period of 2019. However, the sales started dropping from March with 94 % decrease in April compared to the same month in 2019. The sales went a little up in May but it was still 75 % less than last year.

Summer season is very important for the local developers since the big portion of sales is realized in summer period. For example, June -September in 2019 accounted for 41% of sales.

The dynamics of sales according to months

However, due to closed borders and restrictions the expectations of the developers for summer season are not so high. Most of the developers forecast significant drop in summer sales from 30 % to 80 % compared to the last year.

Pricing

Despite existing circumstances and pessimistic expectations, the absolute majority of developers in Batumi do not plan to decrease prices of flats retaining the current pricing policies.

When will construction market in Batumi fully recover and what will be the final consequences of Covid-19 pandemics depend on the dynamics of the virus spread and the efficiency of the steps taken by the government for softening the negative effects. 

The article is prepared based on the research conducted by Cushman and Wakefield.