Asset bubbles have often come right before major financial crises, so it matters to tell the difference between healthy growth and prices that have simply run too far. This study from BTUAI asks whether Georgia shows the warning signs of a bubble in early 2026, looking across residential and commercial real estate, equities, bonds and the currency, and drawing on the latest official data for 2025 and 2026.
The short answer is no. Across Georgia’s markets there is no sign of the broad fever that defines a bubble, when prices climb far above real value and people buy only to resell at a higher price. Housing is the market that deserves the closest attention, especially apartment demand in Batumi and lending to property developers, but the official evidence does not point to widespread overvaluation. Commercial property carries some uncertainty about future oversupply, while equities, government bonds, corporate bonds and foreign exchange show no meaningful speculative excess.
How a bubble is spotted?
The analysis uses five internationally recognised signs: prices rising far faster than incomes or rents; lending expanding very quickly or its rules loosening; more buyers playing with borrowed money; prices drifting far from historical benchmarks; and a market structure that encourages risk-taking. When these appear together, trouble usually follows. In Georgia the markets differ greatly in size, so each is judged on its own scale.
The macro backdrop is strong, not overheated. Geostat’s preliminary figure puts 2025 growth at 7.5%, while the IMF estimates 7.3%, both lower than the previous year’s 9.4% but still high by historical standards. Unemployment was 13.9% and the average wage about 2,283 GEL a month. Inflation rose to 5.7% in May 2026, above the 3% target, mainly because of more expensive food and energy abroad rather than domestic overheating. In response the National Bank raised its policy rate to 8.25% in May 2026, and that spring the IMF judged the banking system sound.
Housing is the one to watch, but it is not a bubble. In 2025 demand in Tbilisi was stable and about 90% of apartment buyers were Georgian residents, while price growth in GEL slowed to 4%, a picture of calming rather than overheating. The National Bank’s own model, which compares prices with a fair level, found no meaningful deviation as of June 2024. One detail still deserves attention: Tbilisi apartment sales picked up again in early 2026, rising 19% year on year in the first quarter and 24% in March.
Lending deserves watching, not alarm. Mortgage growth rose from 10.4% in April 2025 to 13.4% a year later. The rules loosened slightly, yet quality stayed high: overdue mortgages fell to just 1.3%, and around 34% of GEL mortgage applications were still rejected. The most sensitive spot is Batumi, where almost 40% of apartment demand in mid-2025 came from foreigners, something the National Bank openly calls a vulnerability, because the market would feel it quickly if outside demand weakened.
Commercial property: unclear, but leaning no. Offices and shopping centres look sturdier than their thin data suggests, and the Tbilisi price index was stable in mid-2025. The real risk here is future oversupply rather than today’s prices. Because more than 70% of business loans are secured by real estate, and lending to developers was still growing about 25% a year, the National Bank has drawn up rules for how banks finance property that has not yet been built.
Equities and bonds are too small to bubble. At the end of 2024 the Georgian Stock Exchange listed just five companies worth 7.3 billion GEL in total, with trading so thin (0.01%) that a bubble cannot physically form. Government bonds outstanding reached 10.6 billion GEL in mid-2025, almost all held by banks, the National Bank and the pension fund, who keep them to maturity rather than trade. Corporate bonds grew fast, from 106 million GEL in 2014 to 5.3 billion in 2025, but 67% of 2025 issuance came with state support through Enterprise Georgia, which is financing help rather than speculation.
What should be done, calmly and precisely?
On housing, the National Bank should keep its strict borrower rules and watch financing for developers and for not-yet-built property. On commercial space, deeper analysis and stress tests are better than tightening everything at once. On equities and bonds, the priority is to deepen the markets and improve transparency, since the real problem is thinness, not overheating. Better public data, such as prices by city and the types of buyers, would help most.
This analysis was prepared by the academic team of the Business and Technology University (BTU), together with BTUAI, in Tbilisi, Georgia. It draws on publicly available official and industry sources and is analytical in nature, not investment advice. The full report, with a verdict for each market and all sources, is attached as a PDF.
Keywords: asset bubble Georgia, Georgia real estate, Tbilisi housing market, Batumi apartments, property prices, mortgage lending, National Bank of Georgia, Georgian Stock Exchange, government bonds, corporate bonds, financial stability, Georgia economy 2026.
Citation: Business and Technology University (BTU) & BTUAI. (2026). Is There an Asset Bubble in Georgia? Tbilisi, Georgia.