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the CIAN analytical center, TASS reports. In August, the average projected transaction price in Moscow (excluding luxury real estate) was 189,000 rubles (a decrease of 1% in monthly terms and an increase of 17% in annual terms).
According to Dom.Rf, the total amount of residential launches in 8mo21 has almost doubled y/y, to 28mn sqm. June and July were the strongest months during the period, each exceeding 5mn sqm of launches and surging 2.4-3.0x y/y. In August, the market started to cool, with new projects reaching 3.2mn sqm, some 60% of June-July launches,but still showing 23% y/y growth. We think the sector is going to cool in the short term, due to the modification of the subsidised mortgage programme, which haseen a key demand driver. The rate of the subsidy was increased 50bp from 1 July (to 7%) and the mortgage limits are now lower, at RUB3mn for all regions (vs. the RUB12mn for Moscow and St Petersburg, and RUB6mn for other geographies). Partially offsetting this, the family mortgage programme (with a 6% rate, and a limit of RUB12mn for the capital and RUB6mn for the regions) was prolonged until YE23, and its participation parameters were lowered. The family programme now requires just one childorn after 2018 (vs. at least two before). Across the listed universe, there is toe a reversal in mortgage sales (75% of deals in 2Q21 vs. 60% prior to the introduction of subsidised mortgages) in the near term, we expect, mostly on the lower mortgage limits in Moscow and St Petersburg, as the family mortgage programme is unlikely to compensate fully for this. Other near-term sectoral downside risks include the higher interest rate environment, as well as fragile consumerudgets, while prolonged subsidised family mortgages improve the longer-term outlook.
9.1.5 Retail sector news
The Ministry of Industry and Trade of Russia recommended that retail chains switch to direct contracts with suppliers of socially significant products. Viktor Yevtukhov, deputy head of the Ministry of Industry and Trade, spoke about this. According to him, the transition to direct contracts will significantly reduce the final price, Izvestia reports . With such cooperation, the cost of products is fixed in a contract for a long time. The deputy head added that the ministry is already considering the possibility of legislative consolidation of this norm. The offer concerns products that are subject to seasonal price fluctuations, such as meat, milk,orsch set and eggs.
The Federal Anti-Monopoly Service has issued a warning to Magnit and X5 Group concerning the high prices they are charging in the Moscow Region for certain products (flour, bread, chicken and pork). Magnit and X5 had 10% higher prices in certain municipalities of the Moscow Region (whereoth chains have dominant positions) than in other municipalities. According to the regulator,oth chains must lower their prices within ten days of the receipt of the notice or face sanctions. Food CPI in Russia haseen on a rising trend over the last year (it was 7.7% in August 2021 vs. 4.3% a year
108 RUSSIA Country Report October 2021 www.intellinews.com