Issue 1, 2013 February-March - Investor.ge

that this year prices will increase 15 to20 percent. He noted that rental pricesfor commercial property are already followingthat track: on Pekin Avenue, commercialspaces cost as much as $12,000per square meter prior to the war. Followingthe financial crisis, prices dipped to$5,000 per square meter but today theyare bouncing back, and the average costis around $11,000 per square meter.He noted that if there is peace andstability in Georgian politics, the pricescan continue to grow.“Despite the fact that, over the last15 years, the cost of apartments in Vakehas risen from $300 to $1,500-$2,000,the cost of apartments in Georgia overallremains lower than, for instance,in Azerbaijan; in Baku the cost of onem2 can reach $5,000, and in the Balticregion- $12 000.”For prestigious districts like Vake,Vera, Mtatsminda, and Sololaki, Palavandishvilibelieves apartments couldcost as much as $3,000-$5,000 per squaremeter over the next two years if the currenttrends in pricing continue.“Real estate rent today is too expensivein the central districts,” Eristavi toldInvestor.ge, noting that the average costof apartments for Rentals Ltd clientsis between $1500 and $2500 dollarsa month. House rentals can go muchhigher, with prices from $3,500 to $4,000a month.Eristavi explained that high rentprices are due to a number of factors,including the increased cost of incometax for leases - in 2010 it was 12 percent,but it increased to 20 percent in 2011.A second factor is the shortage ofavailable apartments – especially apartmentsthat meet the high standardsrequired by foreign workers and diplomats.“[S]ince 2008, practically no newapartments have been constructed. Theapartments constructed earlier have alreadybeen occupied, and delivery of newones has been restricted,” Eristavi noted.“Today, the Georgian market suffersfrom a deficiency of apartments withstandards that meet client’s requirements,”he said. “Very often leaseholderspropose very high costs for theirapartments… In Georgia, constructionof large apartments is common, but itis very difficult to lease an apartmenthaving approximately 1800 m2 with itsown swimming-pool, cinema and so on.The cost of such a lease, in some cases, isas much as $15,000. However, the mostpopular demand is for houses with threeor four bedrooms, with yards, at a costof $4000 a month. And there is a deficitof such houses on the market.”