Batumi’s Real Estate Market: Growing Interest from Foreigners

According to an overview of Batumi’s real estate market, sales significantly declined in 2024. However, demand from foreign nationals, particularly Israeli citizens, continues to grow. Purchases by Israeli buyers increased by 55%, highlighting their strong interest in Batumi as both a leisure destination and an investment opportunity.

For Israeli buyers, Batumi is not just a tourist hotspot but also a long-term investment destination. The coastal city, with its infrastructure and tourism potential, attracts foreign attention and drives price increases. Additionally, Batumi is seen as a culturally and socially adaptable city for Israelis, further boosting demand for real estate.

On the other hand, sales to locals and Russian nationals decreased during the first nine months of 2024. The number of apartments sold in the primary market dropped by 22.9% year-on-year, largely due to domestic instability and the outflow of migrants. This trend has significantly impacted market stability, leading to an overall decline in sales.

The decline in demand from Russian nationals has also been a key factor. Purchases by Russian buyers dropped sharply, driven by geopolitical instability and economic uncertainty. This trend underscores how foreign investment often depends not only on the local market but also on the political and economic conditions in the investors’ home countries.

While property prices in Batumi continued to rise, the rate of increase slowed. During 2022-2023, monthly price growth ranged from 2-3%, but in 2024, it fell below 1%. Nevertheless, the average market price rose by 3% compared to the previous quarter, indicating partial market stability and sustained foreign demand.

The slowdown in price growth suggests that the market is becoming more sustainable, reducing the need for constant rapid increases. This creates an environment where property owners can maintain the value of their assets over longer periods, while investors have more time to make informed decisions. Although the growth rate has slowed, it does not imply a decline in prices, reinforcing the market’s stability.

In the first nine months of 2024, the total market value of apartments sold in Batumi reached $675.5 million, 10% less than the same period last year. This decline was driven by migrant outflows, high interest rates, and domestic instability. However, it is noted that the price growth rate has slowed, and price stabilization at current levels is expected by 2025.

Looking ahead, the market is likely to rely more heavily on foreign investors, as their demand remains high and they are more willing to make decisions under current conditions. This is particularly true for Israeli citizens, whose interest in Batumi continues to grow. However, to encourage local buyers, additional support measures are needed, such as favorable financial conditions, lower interest rates, and investment incentives.

Source: Galt & Taggart’s Real Estate Market Review, 2024.