Page 92 - RusRPTFeb22

9.1.3 Aviation sector news
9.1.4 Construction & Real estate sector news
More than 87.5 mln passengers were transported on domestic routes in 2021, which is almost 56% more than in 2020 and surpasses the figure for 2019 by 20%," the statement said
According to the government’s preliminary data, in 2021 completions reached a record high 90mn sqm. The strong results reflect the sector rebound after the limitations associated with the pandemic lockdowns as well as the upbeat demand trends that rose on the back of the state mortgage support in 2020-21. Total completions were 10% higher than the annual results in both 2019 and 2020. For 2022, state officials anticipate comparable results of 90mn sqm, supported by the rise in the number of construction permits (January-November up 42% YoY). We note that, in the medium term, overall construction activities could see multiple headwinds from higher mortgage rates, lower state support for mortgage origination, upfront loaded demand, and modest consumer budgets. This could pressure demand and subsequent completions.
The total number of deals on Moscow’s primary real estate market (DDU) in Moscow increased 30% y/y, to almost 144,000, during FY21. In 4Q21, deals were up 7% y/y (43,400), according to Rosreestr. We note that strong results for the year were largely attributable to 1H21 (+71% y/y), driven mainly by the subsidised mortgage support and the associated spike in demand. 4Q21 printed a robust 7% y/y increase (comparable with 5% in 3Q21), as interest rates picked up, with the key rate reaching 8.5% by YE21, +175bp vs. September 2021 and +300bp vs. June 2021. Moreover, the limits of the subsidised mortgage programme were downsized to RUB3mn for all regions, vs. RUB12mn for Moscow and Saint Petersburg and RUB6mn for other regions from 1 July, which also curtailed demand. We are cautious on 2022F, as consumer budgets continue to be fragile during the turbulent macroeconomic environment, while the CPI is to remain lofty in the next 3-4 months, according to our macroeconomic team. This suggests that the Central Bank is to continue the key rate hike. Our macroeconomists forecast it to add 75bp by YE22F (9.25%). The results of the listed developers deviated from the demand trends in the 4Q21, as they either focused on prices over volumes, their portfolio dried up or expanded aggressively. PIK showed flattish y/y results in both 4Q21 and 3Q21 vs. 22% y/y growth in 1H21. Etalon's numbers were down 23% y/y (-36% y/y in 3Q21) against a flattish 1H21, due to its reduced market offer. LSR continued to favour prices over residential volumes, and printed 25% y/y correction vs. -50% y/y in 3Q21 and -10% y/y in 1H21. Samolet had a 2.2x y/y growth in sales, which was largely due to an increase of sales launches (+18% y/y) and prices that are lower than competition, with a
92 RUSSIA Country Report February 2022 www.intellinews.com