Construction Business Trends in 2007

Nino ArvelDaZe

The world’s leading economies have difficult period on mortgage market. Georgian experts state that this serious wave will not expand in Georgia.

Georgian representatives from construction sector do not see any danger and declare that demand in Georgia is importantly increasing. The capital inflows from Russia went into central district constructions, nowadays the important part of foreign transactions is spent for the same, but it does not concern central parts. The architect Zaza Kvirkvelia considers that Georgian construction market is not fully taken over yet, demand is rising that does not refer to expensive districts.
Zaza Kvirkvelia, architect told us that Georgian construction sector develops quickly and great attention is paid to the rise of quality. Taking into consideration the fact that average society is being formed in Georgia, building and construction sector of the city moves from the centre to suburbs. The demand on average price flats rises. Middle price is considered to be USD 800-1000 Sq. meters. One of the reasons of the tendency becomes the quick rise of land prices in central districts of the city: starting from USD 1200-1500 per Sq. meter. Didube – from USD 1000 per sq.meter. As for the Vake and Vera territories, according to Mr. Zaza Kvirkvelia there is no land left for sale in the above mentioned districts, therefore it is hard to discuss prices there.
As for the demand of Georgian population on new residential areas, it has greatly increased. Transaction indicator have risen in 53%, the majority of which flows to construction sector.
According to the data of the city development department, 4 million sq. meters of land plot have already been issued, although the year has not ended yet and the figures can not be considered to be final. The index reached 2 million sq. meters in 2006. Buildings should be constructed on the issued land plots during the period of two years, although it’s worth noting that the number of permissions is also about to increased next year.
The biggest demand is on 50-60 sq. meter residential flats, that are not built in the central districts of the city and customers may afford buying two or three room flats for about USD 40 -50 thousands. There is a great demand on flats, located on the territory of Didi Digomi. Experts suppose that land area for building will reach 8 million qs . meters next year. However, Zaza Kvirkvelia believes that the index is still not enough to meet the demand of Georgian population. About ten companies are involved in construction business. There is a lack of commercial and office areas on the market, as demand on them sharply rises. Although it is nearly impossible to purchase them. Office area prices in central districts starts with USD 2000 and reaches USD 2400, but buying less than 100 sq. meters is not permitted. As for commercial area, its price reaches USD 5000 per sq. meter.
Initial prices in USD
Bagebi –1400
Saburtalo – 800
Sairme – 1000
Jikia str. – 450
Gagarini – 800
Ortachala – 650
Sarajishvili metro station – 450
Gelovani avenue (vashlijvari corner) – 450
Avlabari- 700
Krtsanisi – 800
Digomi park – 650
Isani metro station – 700
Varketili metro station – 600
Didi Digomi – 600