TBILISI, DFWatch–Georgia is seeing a slowdown in mortgage lending, driven by high interest rates and broader economic uncertainty.
According to the National Bank of Georgia, commercial banks issued 24,000 new mortgage loans in the first half of 2025, down 13% compared to the same period last year. Despite the decline in the number of loans, the total volume issued increased slightly to 2.05 billion lari, suggesting that property prices have continued to rise.
The average value of a new mortgage loan has jumped from 73,000 lari in 2024 to 85,000 in 2025 (an increase of 17%) reflecting the ongoing rise in real estate prices. Developers say this trend is critical, as limited access to mortgages could affect the housing sector.
Interest rates have also risen. As of June 2025, the average rate on lari-denominated mortgages was 13.09%, up more than 1.4 percentage points from a year earlier. Some borrowers have turned to alternative financing, using personal savings instead of bank loans, particularly as deposit interest rates have fallen.
In response to the cooling mortgage market, Georgia’s central bank eased lending rules in February. New regulations allow buyers to finance up to 90% of a property’s value through a mortgage (up from the previous 85%) in an effort to stimulate demand.
Despite the slowdown, developers and some banking analysts remain cautiously optimistic. Flexible payment plans and an increase in direct, non-mortgage purchases have helped stabilize overall real estate transactions in the short term. (Rezonansi.)
