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finance projects and should drive prices up later this year. Pre-selling apartments is a wide spread industry practice and considerably eases the financing needs for construction. However, in an effort to improve the protection of consumers the Kremlin has banned the practice earlier this year. The issue was put on the agenda by the Kremlin in the pre-election period to protect buyers from the situation in which they have paid for an apartment during the construction stage, but where the developer later went bankrupt. The dangers have been more prominent by some small protests by would-be homebuyers that were ripped off by unscrupulous developers that never built the promised housing at all. They posted pictures of themselves kneeling and calling on the Kremlin to help. However, the measure aimed at protecting consumers might end up increasing the housing prices and curb the market growth that has been booming on the back on lowering mortgage rates and state support . The latest data showed that the number of pre-sold share agreements on newly constructed housing projects in Russia in the first quarter of 2018 increased by 16% y/y to 147,000 . For the same quarter of last year, the market saw a 17% y/y contraction. A survey conducted by the Vedomosti daily among real estate developers showed that the measures coming in effect as of July 1 could raise the pricing for newly constructed housing by 5%.
9.1.6 Agriculture sector news
Crops in Russia and Ukraine have been hurt by hot dry weather that may reduce the harvest this year . Drought has afflicted the southern Russian regions and Ukraine. Russia collected a record-high harvest of 134mn tonnes in 2017 and previous estimates said Russia was on track for 116.9mn tonnes this year, but the harvest could fall as low as 100mn.
The domestic Agriculture Market Studies (IKAR) cut the harvest forecast for the second time this month from 117mn to 114mn tones for grains in general and from 73.5mn to 71.5mn for wheat in particular. The USDA cut the wheat harvest estimate for Russia by 5% to 68.5mn tonnes.
SovEkon analytic centre has also cut the grain harvest forecast from 124mn to 199.6mn tonnes, including for grain from 77mn to 73.1mn tonnes. The representatives of the Ministry of Agriculture have lowered the official harvest target to 110mn tonnes and it could fall as low as 100mn tonnes, according to Vedomosti, although compared to previous years that is still a healthy harvest.
The story is similar in Ukraine which is also suffering from a drought. Ukraine’s 2018-2019 crop year wheat and barley harvest and exports are expected to decline due to a severe drought across the country, according to a report published by the UkrAgroConsult agriculture consultancy on June 12. The consultancy's wheat harvest forecast was lowered by 3% to 25.5mn tonnes and exports to 16mn tonnes from 17mn tonnes forecast in May. Satellite images of Ukraine show that up to 70% of the crops are drying out due to high temperatures, the local press reported on June 13.
Mike Lee, an independent agricultural consultant is current on his annual Black Sea Crop tour and has also reported on his twitter account that conditions are very dry, but said it was still too early to say if or how much damage to the harvest this weather will do.
In Russia wheat prices in Siberia have already reacted to changing outlook and jumped by 20%, while other regions so far have avoided sharp wheat price fluctuations. However, some analysts surveyed by Vedomosti believe
RUSSIA Country Report July 2018 www.intellinews.com