Real Estate Price Dynamics and Their Impact on Financial Stability in Georgia: Assessment of Systemic Risks and Economic Resilience

Abstract

This paper examines the price dynamics of the new residential real estate market in Tbilisi and its potential link to
financial stability in Georgia. The study utilizes the National Statistics Office of Georgia's (Geostat) residential property price
index for 2025–2026, official macroprudential policy publications of the National Bank of Georgia, and the financial accelerator
theory. The annual price index growth was 11.5% in the first quarter of 2025, 5.4% in the second quarter of 2025, and 4.9% in
the second quarter of 2026. A four-pillar conceptual early-warning framework is proposed, comprising indicators for housing
prices and affordability, credit conditions, banking resilience, and macroeconomic shocks. The conclusion indicates that price
growth alone does not confirm the existence of a speculative bubble; risk assessment requires a joint analysis of prices, incomes,
and debt burdens. The study is descriptive and does not establish causal relationships.