Georgian house prices rose 5% — and lost ground to inflation. The yield is the return now

Global Property Guide records national house prices up 4.97% year on year in the second quarter of 2026 in nominal terms, and down 0.81% once inflation is stripped out. In Tbilisi the picture at the end of 2025 was similar in scale: apartments up 3.47% and detached houses up 2.55% year on year. This is not a falling market. It is a market where holding property preserves value rather than creating it.

The same source puts gross rental yields at 7.42% nationally in February 2026, with Tbilisi at 7.53% and Batumi at 7.31%. If capital growth is roughly flat in real terms, then that gross yield — minus management, void periods, tax, service charges and furniture that wears out — is essentially the whole return. An investor who buys on the assumption of yield plus appreciation is, on these numbers, buying on the assumption of yield.

The same data set shows mortgage rates in February 2026 at 12.14% on lari loans and 8.01% on foreign-currency loans. Against a gross yield in the sevens, a lari mortgage costs more than the property earns before any costs at all, and a foreign-currency mortgage is close to a wash while carrying the exchange-rate risk on the repayments. That is why so much buying here is done in cash, and why leverage in Georgia is a strategy for people who expect prices to run, not for people collecting rent.

A flat real market is not a warning to stay away; it is a warning against a particular story. Transaction volumes are healthy — around 78,500 apartments sold nationally in 2025, of which about 42,388 in Tbilisi — so this is a liquid market where you can sell when you want to. The point is narrower: build your numbers on rent you can actually collect, and treat any price rise as a bonus rather than a line in the spreadsheet.