Georgia keeps rates at 8.25% as inflation holds mortgage relief back

Georgia’s central bank left its policy rate at 8.25% on 9 September, keeping borrowing conditions tight as inflation remains well above target. The National Bank of Georgia said annual inflation was 5.6% in August, versus its 3% target, and again pointed to energy and food costs as the main source of pressure.

For housing, the important part is not that the rate stayed unchanged, but that the NBG is not yet signalling a near-term easing cycle. It described policy as moderately tight and said it could raise the rate further if supply shocks start feeding into inflation expectations and second-round price effects. That keeps the cost environment for lari mortgages restrictive even as the property market itself remains active.

The decision follows the 0.25 percentage-point increase to 8.25% in May. The rate was then held in June and July and has now been held again in September. In practical terms, buyers who were waiting for cheaper local-currency financing did not get relief from this meeting.

The housing backdrop is still mixed. Estate Briefing’s Q2 price review showed that asking prices for newly offered homes in Tbilisi were 4.9% higher year on year, while the index rose only 0.9% quarter on quarter. That suggests prices are still rising in the measured primary-market segment, but not at a pace that offsets the pressure from expensive credit for leveraged buyers.

The NBG also highlighted a two-sided risk. Stronger productive capacity, a better external position and a lower sovereign risk premium could help inflation fall faster; persistent energy and food shocks could do the opposite. The next monetary-policy meeting is scheduled for 21 October. Until then, the housing-credit signal is straightforward: the central bank is prioritising inflation control over cheaper financing.