Fewer Mortgages, Higher Volumes – The Sector Responds to Rising Prices

In March 2025, Georgia’s banking sector issued 4,112 new mortgage loans totaling 378 million GEL, according to statistical data from the National Bank. While the number of issued loans decreased by 9% year-on-year, the total volume rose by 15%, signaling a notable rise in the average mortgage size, which reached 92,000 GEL—up from 73,000 GEL in March 2024.

This financial snapshot reveals a mortgage market seeking balance between a slight decline in quantity and substantial growth in value—largely driven by rising real estate prices. This trend is prompting borrowers to request larger sums from banks, albeit less frequently.

In response, the Financial Stability Committee eased mortgage regulations. The minimum down payment requirement was reduced from 15% to 10%, and for emigrants—from 30% to 20%. This move aims to increase loan accessibility for individuals without local income, potentially broadening the borrower base.

As for loan conditions, the average interest rate on GEL-denominated mortgages in March stood at 11.86%, marking a slight 0.09 percentage point decrease from the previous year. While this creates a somewhat more favorable borrowing environment, the rising real estate prices continue to translate into larger financial obligations for borrowers.

This dynamic raises important questions about the sustainability of mortgage lending growth, especially if property prices continue to rise and middle-income buyers struggle to enter the market. The coming quarters will reveal whether the loosened regulations can stimulate demand or whether the increasing average loan size will further elevate both banking sector risks and household financial burdens.

Would you like this adapted into a press briefing, newsletter item, or policy memo?