As suggested by ISET’s most recent Consumer Confidence report, Georgian consumers are in no mood for shopping. And, yet, Tbilisi is abuzz with excitement about the recent lavish opening of East Point – a giant new shopping and entertainment center, the largest of its kind in the country. Thus, while consumer confidence is hitting new lows, the supply of retail space and world-class shopping malls continues to hit its highs.

The average residential rental price first fell to 7.46 USD per m2 (a historical minimum since the start of the study) in October 2015, and after a slight peak in the following month reached 7.66 USD per m2 by the end of the year.

The lari depreciation has started to affect real estate market prices in Tbilisi. The average rental price for residential property has continued to fall, reaching a new historical minimum in February 2015.

Bubbles belong to the most fascinating phenomena in a market. Suddenly, people are willing to pay prices that are completely out of touch with the fundamental economic values of assets. In the stock market bubble of the 1920s, persons who had never before considered becoming investors borrowed money and bought shares, so as not to miss out on the chance to become rich.

Investments in real estate compensates for risk premiums (compared to money deposits) and more than covers its costs (Mortgage interest rate). Average rental price for residential property continues to fall and reaches its historical minimum since March 2013.