If you want to optimize the returns on investment from your property market, it is prudent to understand the different cycles. Particularly, you need to differentiate and take advantage of the seller’s and buyer’s markets. For investors interested in the Georgian real estate, the biggest question is, “Is a buyer’s or seller’s market?”
What is a Buyer’s or Seller’s Market?
A seller’s market is a property market where the number of buyers is higher than the available homes for sale. It means that the supply is lower than the demand because the number of sellers are fewer, culminating to steady rise in the price of property.
The reverse is true when it comes to the buyer’s market. In this situation, the number of sellers is higher than buyers, resulting in lower prices because of low demand. Here, the buyer holds an upper hand in negotiating for the property because it is pretty easy to walk away and get another.
Georgia’s Property Market: A Buyer’s Market
The Georgia’s property market is largely a buyer’s market, a trend that formed early in 2020 when COVID-19 pandemic struck. Here is a closer look:
COVID-19 Pushed Georgia’s Real Estate into a Buyer’s Market
The huge economic impacts from COVID-19, especially lockdowns that saw many people lose their jobs and businesses closing down, cut down the buying power of many potential clients. The result is a market with sellers chasing after a handful of buyers.
Notably, even the foreign buyers who were willing to come to and invest in Georgia are finding it tough to catch flights as their countries try to prevent the spread of the pandemic. Because of this impact, the house prices in Georgia had dropped 10.6% YoY in June 2020, which followed another sharp fall of 10.6% reported earlier in May.
The Effect of Mortgage Stimulus Program
When the Georgian government noted how serious the pandemic was in mid-2020, it started the mortgage subsidy program that helped to cushion developers and avoid further losses. The program worked in two ways; the industry did not collapse, and it started recovering in September 2020, earlier than most countries in the globe.
Although impressive, the recovery did not work as anticipated because there are so many things that impact the property market, such as currency and global restrictions. The third wave of coronavirus also struck when it was least expected. Therefore, we are still in the buyer’s market, but it might not last long because more countries are now relaxing the measures they had put in place to contain COVID-19.
If you are a real estate enthusiast interested in the Georgian market, the best time to join is when the prices are low, the buyer’s market, such as now. Like other property markets on the globe, Georgian real estate is trying to find way out of the turmoil created by COVID-19 pandemic, and this is the perfect moment to jump in. Consider reaching to John Dodelande, one of the experts in the real estate markets involved in the development of the Georgian tourism sector. Simply put, you cannot go wrong in this remarkable market!