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We are in this together – How Georgian Government supports real estate market

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The Prime Minister of Georgia Giorgi Gakharia has presented a fourth anti-crisis plan today worth 434 million GEL aimed at supporting the construction and development sector of Georgia.

The first anti-crisis plan supports the tourism sector of Georgia, the second supports agriculture, the third – education and today we are presenting the fourth anti-crisis plan which is dedicated to the construction and development sector of Georgia, which before the pandemic accounted for 9 per cent of our gross domestic product”, said Gakharia.

He said that the construction and development sector was one of the fastest growing sectors which employed 120,000 people in 2019. But Gakharia said that the anti-crisis plan will also support related businesses such as the production of construction materials, furniture manufacturing, trade in various equipment. 

The state will subsidise the interest rate of mortgage loans

The state will subsidise 4 per cent of the interest rate of the mortgage loan for 5 years. The subsidy will be issued for loans not exceeding 200,000 GEL and will only apply to those who will take mortgage loans to purchase newly built residential apartments from June 1, 2020 to January 1, 2021.

The state will issue loan guarantees on mortgage loans

The state will issue a loan guarantee to the amount of 20 per cent of the loan. The guarantee will last five years starting from the loan issuance date and will apply to loans where the participation is at least 10 per cent.

The state will buy three times more apartments than planned for IDP families

The state will spend 150 million GEL to buy about 1,800 apartments under construction in the period of 01/05/2020 – 01/01/2021. The purchase will be made through an auction, where the price should not exceed 1,700 GEL per 1 square meter.

The state will insure the completion of ongoing construction

Promoting the use of Escrow account in development activities

The total budget of the fourth anti-crisis plan is 434 million GEL which is to be divided the following way:

  • 70 million GEL – subsidy of interest rate on mortgage loans by the state
  • 14 million GEL – a state guarantee on a mortgage loan portfolio
  • 150 million GEL- purchase of residential apartments for the IDPs
  • 200 million GEL – a state guarantee for the completion of a residential real estate project

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