Author: Ani Kakuria
Businesspeople, investors and others engaged in economic activities are forced to operate in a rapidly changing and challenging environment. To ensure that their decisions are realistic and adequate under the current circumstances, it is important to start by analyzing the environment.
Let us imagine that you have a certain sum of money that you wish to invest in real estate abroad. What happens in such a case? You should normally start by identifying all the important factors and conducting a strategic analysis.
One of the most widely used methods is the PEST analysis. It provides information about macro factors affecting political, economic, social and technological issues that affect any long-term activities.
Let us use the PEST analysis results to find out whether you would be justified to invest in real estate in Georgia.
Politics (P) – people who decide to buy a property abroad will be interested to know about local government regulations and legal framework. What is the situation like with regards to political stability, tax principles, as well as commercial and security regulations?
It is worth noting that investment in real estate is tax-free both for residents and non-residents in Georgia. You can buy, sell or lease a property and turn it into a source of income without paying additional sums into the state coffers. From a legal point of view, foreign nationals undergo the exact same procedures as Georgian citizens – they only have to sign a service agreement with the company that they plan to cooperate with.
Furthermore, the policies adopted by the Georgian government actively encourage investment in real estate. For example, recent subsidy programmes were implemented specifically to stabilise the market and stimulate real estate sales during the pandemic.
Economy (E) – economic assessment includes factors such as inflation, interest rates and economic growth rate. In this regard, it would suffice to say that according to the World Bank, Georgia ranks 7th in the world by ease of starting and conducting economic activities. With regards to real estate, even foreign nationals can benefit from 10-year mortgage loans at the average interest rate of 9-11%. Moreover, compared to most other countries in Europe, you will get more profitability and pay less when you buy real estate in Georgia, which is bound to be attractive for investors operating on any budget.
Social (S) – one of the most important factors listed in this article is the social aspect, which accounts for customer demographics, culture, historic heritage, lifestyle and education. Investors can use this factor to identify customer needs and develop their investment.
While Georgia has an ancient culture, the modern day local market is a mixture of old and new. That is why Georgia is becoming an increasingly attractive tourist destination despite the current crisis facing the tourism sector. This is one of the most important factors to consider when you buy a property abroad, as it determines the development potential and profitability of your investment.
Technology (T) – last but not least, there is the technology factor. Technology can affect any event in a positive or negative manner. The role of the internet is crucial, as is government spending on technology research, as well as implementation and promotion of projects and programmes that will make bureaucratic processes and other actions more flexible. To this end, the Public Service Hall of Georgia can be regarded as a technological achievement, as it enables provision of all types of services (both physical and remote) in the same space.
Such is the brief PEST analysis for the current environment in Georgia.
So, why choose Georgia? The answer is – by buying real estate here you are investing in a country that actively encourages and supports this sector, and you can purchase a property either for personal use or as a business. In either case, you will be lucky to find yourself in an environment where starting business is not only procedurally easy, but is also encouraged by social and cultural factors.
Most importantly, you do not have to be present in Georgia to take advantage of all the aforementioned benefits. Technology allows you to monitor and manage your investment from all corners of the globe.