WHO CAN MORTGAGE TO BUY FINISHED HOUSING? AN EMPIRICAL ANALYSIS OF A FORMER SOVIET REPUBLIC

The housing markets in former Soviet Union countries have undergone substantial transformations since 1991, with mortgage lending emerging as a pivotal instrument driving housing demand and ownership. In Georgia, as in many other post-Soviet states, official data demonstrate a consistent rise in the number of individuals entering the mortgage market to purchase housing, particularly finished housing units. This trend underscores the necessity of understanding the socio-economic factors that influence mortgage uptake among urban residents, particularly in rapidly transforming transitional economies. This study investigates the determinants of mortgage loan acquisition for the purchase of finished housing, using primary survey data collected from a sample of 356 mortgage loan holders in Tbilisi, the capital and largest city of Georgia. The empirical results indicate that individual income and employment status are the most significant predictors of a household’s decision to secure a mortgage. Higher income levels and stable, formal employment significantly increase the likelihood of mortgage loan approval and uptake. In contrast, demographic variables such as age, gender, and education level were found to have limited predictive power in the decision-making process. These findings highlight the critical role of economic security, labor market integration, and reliable income sources in shaping access to housing finance in transitional economies. This study contributes to the existing literature in three main ways. First, it offers novel empirical insights into the socio-economic characteristics of mortgage borrowers in Georgia, addressing a substantial gap in the regional literature. Second, it provides a foundational assessment of the Georgian housing finance landscape, serving as a reference point for comparative studies in other former Soviet republics, including Armenia and Azerbaijan. Third, the study delivers practical implications for policymakers, financial institutions, and housing market stakeholders by offering data-driven evidence on the prerequisites for mortgage accessibility in post-socialist urban contexts. In doing so, it enhances the understanding of mortgage dynamics within the broader framework of economic transition, institutional development, and urban transformation.