On statistics and modern standards for the evaluation of housing services in the system of national accounts
03 May 2018 by Nazik Avlyakulova
Irina Solovyova, Deputy Head of the Department of Income and Accounts of Institutional Sectors, Office of National Accounts, Rosstat
Victoria Glushkova, consultant of the department of statistics of national wealth and capital transactions of the Office of National Accounts of Rosstat
UNDP: What is evaluation of the housing services in the system of national accounts? Why is it important?
Irina Solovyova: If a person rents the house and pays for renting money, this is an economic operation, the so-called actual rent (actual rent), the need for accounting of which is beyond doubt. If a person lives in his own housing and, accordingly, does not pay anyone for it, it would seem that no rent is observed in this case. Nevertheless, the methodology of national accounts provides for the recording of so-called imputed rent, when the owner of a condominium imposes a conditional income of the amount that he would pay if he rented the same apartment.
This is done to make it possible for international comparisons of the gross domestic product (GDP), as the share of the actual leases in different countries can differ significantly and the lack of adjustment to imputed rent would lead to distortions.
UNDP: What is the methodology of the evaluation of housing services in the system of national accounts?
Irina Solovyova: The cost of such conditional housing services is usually estimated by one of two methods, depending on the availability of information on the rental housing market:
1) Equivalent rent method - imputed rent is evaluated at a rental cost similar in terms of housing characteristics. Turkmenistan uses a similar method for assessment of the housing services, but in a very simplified version. The global statistics recommends this method for countries with limited information and data base.
2) The method of user costs. In this case, the cost of living in their own dwelling is calculated as the sum of the current expenses for maintenance and repair of the housing, consumption of fixed capital (depreciation of dwelling) and net profit, usually estimated for the year at a standard rate of 2.5% of the market value of the housing. This method is currently used in Russia.
UNDP: Does such an assessment and accounting in the system of national accounts affect the state cost of housing or mortgages?
Victoria Glushkova: The evaluation of the imposed rent is carried out only for the purposes of the correct statistical account of economic processes in accordance with international standards and does not affect the real cost parameters of the housing market.
UNDP: Is it possible to assess retrospectively? What conditions are necessary for this?
Irina Solovyova: It is not only possible, but also recommended for users of statistical information to have as long as possible a series of data calculated using one of the methodological methods. For the first time, Rosstat included the results of calculations of housing services using the method of user spending in GDP in 2015 for the period starting in 2011.
UNDP: Is any special legislation required? Housing cadastre, a specific decree?
Victoria Glushkova: Accounting for imputed rent is an integral part of the compilation of national accounts of any country. For a correct evaluation of this indicator, a qualitative information base is necessary, including the market value of housing. Any state assistance: conducting a housing census, maintaining forms of statistical monitoring of the housing market, cadastral registration of housing can significantly improve the quality of this indicator.