Apartments in Tbilisi are becoming more expensive, mortgage loans are growing in size, and the rules for obtaining them are tightening. At the same time, the official average salary in Georgia remains significantly higher than the median income—the actual earnings of a substantial part of the population. What regulations come into force in 2027 and how much does one need to earn to buy an apartment in the capital? Details in the SOVA report.
The Tbilisi real estate market continues to expand. In the first eight months of 2026, Georgian banks issued nearly 40,000 new mortgage loans with a total value of 4.1 billion GEL (approximately 1.6 billion USD). Compared to the same period last year, the number of mortgages issued increased by about 22%, while their total value surged by 47%.
The disparity between these two indicators is significant: people are not merely taking out mortgages more frequently—the loans themselves have become larger. The average size of a newly issued mortgage grew from approximately 86,000 to 104,000 GEL.
One key factor is rising property prices. At the same time, the conditions under which an apartment can be purchased on credit have also evolved.
Typically, a bank does not cover the full purchase price of an apartment. The buyer must pay a portion out of pocket—this is the down payment.
The National Bank of Georgia sets a maximum loan-to-value (LTV) ratio for commercial banks. If the maximum permitted LTV is set at 90%, it means the bank can finance up to 90% of the property’s value, while the buyer must provide the remaining 10%.
Previously, the maximum LTV for mortgages denominated in lari stood at 85%. In February 2025, the central bank raised it to 90%. In practice, this lowered the minimum down payment requirement from 15% to 10%.
For instance, if an apartment costs 200,000 GEL, a buyer previously needed to have at least 30,000 GEL in personal funds. Today, 20,000 GEL is sufficient. Entering the market has become easier. However, this does not mean the apartment itself has become more affordable: the remaining 180,000 GEL must still be borrowed from the bank and repaid with interest.
A Down Payment Alone Is Not Enough
Even if the required 20,000 GEL has been saved, this does not guarantee the bank will issue the remaining 180,000 GEL. A second restriction directly concerns the borrower’s income.
To assess this, the National Bank applies the payment-to-income (PTI) ratio—the proportion of monthly debt service payments relative to a borrower’s net income. Simply put, it establishes the maximum percentage of income an individual can allocate each month toward servicing debt.
Currently, two thresholds apply to loans issued in lari. If a borrower’s net monthly income is below 1,500 GEL, no more than 25% of that income can be spent on loan payments. For incomes of 1,500 GEL and above, the cap rises to 50%.
For example, with a net monthly income of 1,400 GEL, the maximum allowable monthly debt payment is approximately 350 GEL. With an income of 1,500 GEL, that limit jumps to 750 GEL.
This does not mean a bank will automatically permit an individual to pay that exact amount or approve the desired mortgage. The lender independently evaluates the client’s creditworthiness. However, total debt service cannot exceed the limit established by the central bank.
Nevertheless, these rules are set to shift as early as 2027.
On September 30, the National Bank of Georgia announced a phased increase in the income threshold subject to the 25% ceiling. Starting February 1, it will rise from the current 1,500 GEL to 2,000 GEL, and from September 1, 2027, to 2,500 GEL. The change is being implemented in two stages to prevent a sharp, one-off impact on the market, according to the regulator.
In practical terms, the difference is substantial. A person with a net monthly income of 1,800 GEL can currently allocate up to 900 GEL per month toward servicing debt. Starting in February 2027, with that same income, the ceiling will drop to no more than 450 GEL.
Meanwhile, an individual earning 2,300 GEL currently falls into the category with a maximum debt burden of 50%—up to 1,150 GEL. In February, nothing will change for this borrower, as their income will remain above the new 2,000 GEL threshold. However, in September, once the line shifts to 2,500 GEL, their permissible debt service capacity will drop to 575 GEL.
According to former President of the National Bank of Georgia Roman Gotsiridze, raising the PTI threshold will make it harder for individuals with relatively low incomes to secure large loans, as the share of earnings they are permitted to allocate to debt servicing will shrink.
“One of the National Bank’s arguments is that the total wage volume has increased, and in this case, capping this ratio at such a level for households should not pose a major challenge. But while wages have grown, the National Bank forgets that prices have risen as well. Higher nominal income does not equal increased welfare. According to official statistics, prices have doubled during the rule of Georgian Dream, but we know very well that official statistics misrepresent the reality, as almost all statistical indicators are used for political purposes—including even the population census.”
Gotsiridze argues that the regulator should have maintained the previous threshold of 1,500 GEL. In his view, a 25% cap for borrowers earning up to this amount already provides sufficient protection against excessive indebtedness, whereas raising the bar constitutes deeper regulatory interference in citizens’ financial decisions.
For prospective homebuyers, the reform translates into a noticeable reduction in the accessible mortgage amount. If two individuals wish to buy the same apartment with identical down payments, a borrower earning below 2,000 GEL may simply fall short of the required loan amount: the monthly repayment on the needed mortgage would breach the mandatory PTI threshold.
Gotsiridze anticipates that raising the threshold will modestly reduce the pool of potential bank borrowers. For commercial banks, he assesses the overall impact as limited; however, for individuals with lower incomes, accessible credit amounts will contract.
Developer Installment Plans
Bank mortgages are not the only way to purchase an apartment in Tbilisi on an installment basis. In the primary market, developers offer phased payment plans directly to buyers. Former Vice Governor of the National Bank of Georgia Otar Nadaraia refers to this model as “quasi-mortgages.”
According to him, an increasing number of newly built apartments are being sold through such arrangements rather than traditional mortgages, turning this segment into a systemic consideration for the broader market.
“Today, we have not only a bank mortgage market functioning, but also developer installment plans—which could be described as quasi-mortgages. There is no regulation there, and I believe this presents a major issue.”
According to Nadaraia, a typical arrangement operates as follows: the buyer pays the developer directly over a period of two to three years, after which the remaining balance is financed by a bank. In most cases, the expert notes, banks do step in to refinance this remaining amount.
The issue, according to Nadaraia, lies not in the existence of installment plans per se, but in the fact that they are not subject to the same regulations as bank credit. Such “quasi-mortgages,” the economist explains, are predominantly denominated in foreign currency, exempt from payment-to-income caps, and their underlying obligations may not be reported to the credit bureau system.
As a result, there is a risk that an individual’s liabilities toward a bank and a developer are not assessed as a consolidated debt burden. For example, a buyer might simultaneously service a bank consumer loan while paying installments on an apartment. Therefore, Nadaraia emphasizes, it is crucial to assess not only an individual’s aggregate debt volume, but also their capacity to service all financial commitments at once.
Transparency requirements regarding financing costs also diverge. The economist points out that the banking sector is governed by central bank consumer protection rules; specifically, lenders must disclose the effective interest rate, factoring in not just the nominal rate, but all related borrowing fees. No equivalent requirement exists for developer installment schemes, which, in the expert’s view, creates an additional vulnerability for buyers.
Contractual structures also harbor potential risks. Nadaraia notes that terms vary from project to project: for instance, some contracts permit buyers to walk away from the deal by paying a penalty fee and returning the unit to the developer. While the market continues to climb and prices appreciate, such mechanisms may not cause noticeable strain. However, in a downturn, a portion of units formally recorded as sold could revert to developers.
At the same time, Nadaraia notes, it is essential to distinguish between buyers who entered such arrangements several years ago and those doing so now. Installment plans whose balances banks are currently refinancing were often signed two to three years ago—when property prices were lower and down payments were higher.
Today, by contrast, the market features offers with down payments as low as 0%. In Nadaraia’s view, this indicates that a mechanism initially tailored to high- and upper-middle-income buyers is progressively expanding to riskier borrower profiles.
Consequently, the credit risk of individuals who committed to installment plans two to three years ago differs materially from that of current buyers. A key question moving forward will be how readily the latter will be able to refinance their outstanding debt through banks—both under stable market conditions and in the event of an economic crisis or an outflow of migrants.
Income Levels in Georgia
According to the National Statistics Office of Georgia (Geostat), the average nominal monthly wage for a hired employee in the country stood at 2,389.3 GEL in the second quarter of 2026. A year earlier, in the second quarter of 2025, it was 2,212 GEL.
However, the average wage does not imply that the majority of working Georgians take home around 2,400 GEL. This figure is calculated from the aggregate earnings of all salaried workers, meaning high earners pull up the overall average.
A clearer view of what someone closer to the middle of the income distribution earns is provided by another metric: the median wage. If all employees are ranked from lowest to highest earner, the median wage falls right in the middle: half of workers earn less than this sum, and the other half earn more.
The most recent median wage data published by Geostat dates back to 2024. At the time, it stood at 1,332 GEL, whereas the average wage for the same year reached 1,970.8 GEL. Thus, the median wage was 32.4% lower than the average.
A more recent, albeit fundamentally different, indicator is also available. According to data from the job-search platform Findjobs.ge, across more than 3,300 active job postings with listed monthly compensation, the median offered salary was 1,400 GEL. One-quarter of these vacancies offered a salary of no more than 1,050 GEL, while three-quarters offered no more than 1,800 GEL.
Another perspective is provided by PMCG Research Center, which routinely reviews data from the Revenue Service. In its wage distribution analyses, a significant portion of workers also falls well below the official average: approximately 42% of hired employees earned 1,200 GEL or less.
How Much Apartments Cost
Consider, as an illustration, a 50-square-meter apartment. According to Galt & Taggart, in June 2026, the average price per square meter in Tbilisi’s primary residential market was approximately 1,417 USD. Consequently, a standard 50-square-meter apartment would cost roughly 70,850 USD.
With a 10% down payment, a buyer would first need to accumulate around 7,000 USD, financing the remaining balance through a mortgage.
Despite high property values and expensive borrowing costs, the Tbilisi market is not contracting. Between January and July 2026, the total value of apartments sold in the capital reached approximately 2.45 billion USD—a 27% increase compared to the same period the previous year.
Price increases do not necessarily trigger a drop in demand on their own. Nadaraia points out that the real estate market operates differently from many others: appreciating property values can fuel expectations of further growth and prompt buyers to expedite transactions.
“When prices rise, there is an expectation that they will continue to climb. Paradoxically, the real estate market often behaves this way: when prices go up, demand is robust, but when they begin to fall, demand contracts,” he explains.
Among other factors sustaining the market, Nadaraia cites general economic expansion and rising household incomes. Furthermore, the strengthening of the lari enhances the purchasing power of local earnings against real estate because, despite legal mandates to quote prices in the national currency, market participants continue to benchmark property values in US dollars.
Another driver is the abundant supply of new housing. Active construction continues across both Tbilisi and Batumi.
At the same time, the demographic profile of buyers is shifting. According to Galt & Taggart, Georgian citizens accounted for roughly 85% of apartment buyers in Tbilisi in 2023. By 2026, that share had fallen to approximately 74%. Israeli citizens made up about 11% of buyers, Russian nationals accounted for 4%, and another 11% were citizens of other countries.
Nadaraia identifies the war in Ukraine and the subsequent influx of immigrants into Georgia as a major catalyst for the real estate market in recent years.
“An end to the war could also serve as an economic turning point: many immigrants might leave Georgia. Even though the vast majority rent property, this could also exert a psychological impact on the market—people might conclude that prices will now begin to decline,” Nadaraia notes.
Therefore, the impact of migration is not confined strictly to the number of apartments bought by foreigners, he explains. Shifting expectations among market participants can independently influence demand and price dynamics.
Concurrently, as Galt & Taggart notes, the most affordable segment of the housing supply is shrinking. The share of apartments priced below 1,100 USD per square meter fell from 68.8% in 2024 to 49.5% in 2026.
Yet rapid property appreciation does not inherently signify that the market is in a price bubble. According to Nadaraia, one of the simplest benchmarks is the extent to which real estate inflation outpaces headline inflation.
“If residential real estate prices rise significantly faster than general inflation over a brief period, that is already an important signal.”
In Georgia, real estate has indeed appreciated faster than the general price index. However, in Otar Nadaraia’s assessment, this spread is not yet as wide as it was prior to the Georgian market correction in 2008 or in jurisdictions that underwent severe price drops following rapid run-ups.
In international comparisons—including metrics pegged to GDP per capita—Georgian real estate does not appear unequivocally overvalued either, Nadaraia notes. Still, evaluating systemic risks requires a comprehensive approach: factoring in the currency in which property is effectively priced, foreign exchange volatility, migration flows, substantial supply pipeline, and excessive leverage risks.