Medium-term prognosis of residential real estate market price indices in Tbilisi, Georgia

The importance of real estate market could not be overstated for economics in countries like Georgia, where the share of the construction and real estate sectors is totaling 30% in whole economy. The real estate market is far from being perfect market and this imperfection defines the peculiarity of the research methods. Performing high quality analytical work on real estate market is very difficult and complex task, which brings together working out the methodology relevant to the accessible data (every country has its own difficulties regarding the quality and accessibility of real estate market data), also the rules of interpreting the data and algorithm of drawing out the recommendations.The methods of prognosis of real estate market indices could be classified as follows:1.Expert?s prognosis based on the methods like intuition, deep knowledge of local market, method of analogies;2.Heuristic prognosis ? quantitative and qualitative analysis of factors, method of scenarios;3.Fundamental prognosis of factors (construction volume, supply, demand) ? based on the analysis of economic situation and its influence on real estate market;4.Prognosis based on Regression models ? regression analysis, statistical modeling;5.Prognosis based on multi factor models and Neural Network modeling.In the current article are given the prognosis based on the regression model and the heuristic prognosis of residential market in Tbilisi, Georgia. The outcomes are than compared and checked against the real situation, finally are given the recommendations.The results suggest that the best solution is to use the method combining both heuristic and statistical approaches.