Geostat: In the second quarter of 2023, the Residential Property Price Index in Georgia increased by 3% compared to the previous quarter, while the annual increase amounted to 13.1%

In the second quarter of 2023 the Residential Property Price Index (RPPI) in Georgia increased by 3.0 percent compared to the previous quarter, while the annual increase amounted to 13.1 percent. Compared to the 2020 average, the index change amounted to 28.8 percent, National Statistics Office of Georgia reports.

According to Geostat, the RPPI covers the market of new residential property in Tbilisi, both flats and detached houses segments.

"In the second quarter of 2023 a price increase, compared to the previous quarter, was registered both in flats (3.4 percent) and detached houses (1.6 percent) segments. Compared to the second quarter of 2022, the prices increased in both segments, for flats by 10.6 percent and for detached houses by 16.2 percent. The following graph represents the dynamics of the total RPPI and its sub-indices, as well as the Consumer Price Index.

Residential Property Price Index (RPPI) measures the price evolution for residential properties. The index covers only the market of new dwellings for both, multi-dwelling buildings (flats) and detached houses in Tbilisi.

Property price indexes are used by central banks and other policy-making institutions, as well as by analysts, researchers and other users within and outside the country. RPPI is used for the following purposes:

1. To assess the development and risks of the real estate market;

2. To understand and evaluate the links between residential real estate markets and financial soundness.

The National Statistics Office of Georgia collects data on dwellings for sale from the real estate advertising websites to obtain the necessary microdata to allow for the compilation of the RPPI. The data is obtained automatically, using web scraping. The obtained data is the so-called "offer prices".

For the RPPI calculation, the National Statistics Office of Georgia uses the so-called "characteristics hedonic approach" that has been tested in many countries around the world. According to this approach, RPPI measures the price evolution of a "typical" dwelling," Geostat reports.

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