Page 8 - RusRPTJan23

and the Accounts Chamber have repeatedly called for the scheme to be cancelled. However, President Vladimir Putin announced in December that the program would continue, albeit at a slightly higher rate of 8% as construction is a way of boosting economic growth and employment. These discounted mortgages are causing Russia’s real estate market to overheat. The primary and secondary housing markets are unbalanced (the price difference between a new apartment and a “maintained” apartment is now 40%).
Subsidies have made housing more affordable for more citizens, who have decided to take out mortgages now rather than wait. Demand has risen sharply — faster than supply can adapt — and prices are soaring. In Moscow, it is now impossible to buy a comfort-class apartment in a new building without taking out a mortgage. However, this bubble is unlikely to burst as developers have already sold more than 51% of the housing due to come onto the market by the end of 2023. They need to sell a further 10-20%, which is entirely achievable even if demand falls to summer levels. Defaults on mortgage portfolios could also burst the bubble, but with a failure rate of just 0.4% (and 0.15% in the primary market), this is also unlikely, analysts say.
The sanctions leakage remains significant, but is impacting everything, and the productive industries that rely on western inputs, technology and equipment most.
Consumer goods have largely rerouted to enter Russia via “friendly” countries, with Turkey playing the leading role.
The ban on seaborne shipments of Russian crude oil to EU countries went into effect on December 5. The ban does not apply to crude oil transmitted by pipeline. Germany and Poland, the largest European buyers of Russian pipeline crude, have announced that they will also suspend their pipeline imports.
A few EU buyers (Hungary, Czech Republic and Slovakia) will at least temporarily continue to import Russian pipeline oil. Most of EU crude oil imports from Russia, however, are now ending.
Russia must find new buyers for about a quarter of its crude oil exports. The import ban on Russian petroleum products enters into force in February 2023.
Russian oil exports were halved in the second half of December as shippers paused to assess the risks, but analysts expect the volumes to pick up in the first quarter of 2023 as new routes are found. In addition, Greek shipping that increased its share of transporting Russia oil from 35% pre-war to 55% in the second half of 2022 have been selling old tankers to Russia, which is building up an unsanctioned fleet of its own that will aid this process.
Under the G7 sanctions maritime services related to the transport of Russian
8 RUSSIA Country Report January 2023 www.intellinews.com