ФЕДЕРАЛЬНАЯ СЛУЖБА

ГОСУДАРСТВЕННОЙ СТАТИСТИКИ

Accounting of cost of owner-occupied

housing services

in the Russian SNA

Workshop on measuring the informal economyfor EECCA and SEE countries

S.Levit (Deputy Director, Department of National Accounts, ROSSTAT)

РОССТАТ

2

BACKGROUND

INFORMATION

2012

• OECD Workshop on the implementation in statistical practice ofthe estimates of owner-occupied housing services in line withinternational recommendations

2012-2015

• Development and approval of the methodology for estimation ofowner-occupied housing services in Russia

• Experimental estimates• Preparatory work with statistical users

December 2015

• First publication of the results for 2011-2014

РОССТАТ

3

COMPOSITION OF THE DWELLING STOCK

• Individual dwellings

• Apartments

• Rooms (part of a house orapartment)

• Cottages or villas forpermanent residence

Included in the dwelling stock

• Apartments not for permanentresidence (hotels, motels, etc)

• Hostels, dormitories

• Auxiliary premises

• Common premises inresidential apartment buildings

• Cottages or villas for seasonalresidence

Excluded from the dwelling stock

РОССТАТ

4

The structure of the dwelling stock by form of ownership, % of total

Dwelling stock

owned by

households

Dwelling stock

owned by

government and

legal entities

РОССТАТ

5

Structure of the dwelling stock, %

36

60

4 individual dwellings

multi apartmentdwellings

row houses(townhouses)

Total amount of dwelling stock owned by households –

3,472.8 million m2 (at the end of 2019)

27

73

in ruralsettlements

in cities andurban-typesettlements

РОССТАТ

6

Choosing a method for the assessment of owner-occupied

housing services

Rental equivalence

approach

User cost approach

The share of housing rented at market value is less than 10%

─ √ ≈ 8 %

The difference in price of renting 1m2 of commercial and public/communal housing is more than 3 times

─ √ more than 20 times

РОССТАТ

7

User cost approach

Output of owner

occupied housing services

Intermediate consumption

Consumption of fixed capital

Operating surplus, net

Other taxes on production,

net

РОССТАТ

8

Includes:

•current expenses for repairs and maintenance of the dwelling

•dwelling insurance services

•FISIM for mortgage loans

Does not include:

•capital expenditures on the dwelling

•utility bills

Intermediate consumption

РОССТАТ

9

Net surplus of owner-occupied housing services

𝑈 = 0,025 ∗ 𝑖 ∗ 𝑊, where

𝑈 – net surplus

𝑖 – price index at the secondary dwellings market

𝑊– value of dwelling stock in average annual market prices

РОССТАТ

10

Method for assessing the market value of the dwelling stock

The comparative approach is a method of assessing the value of goods basedon comparison with similar goods for which there is information on thetransaction prices or offers.

The main requirement of the comparative valuation method is to ensurethe structural conformity between the dwelling stock for which prices on thesecondary market are determined, and all available dwelling stock.

It is implemented by making calculations for sufficiently differentiated typesand groups of residential buildings, and in some cases-by applying correctionfactors to the prices of dwellings for sale.

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11

Estimation of the average annual market value of the dwelling stock

1. Data on the average annual market value of residential buildings arecalculated by multiplying the total surface and the market value of 1square meter of housing by detailed groups of dwelling stock.

2. The share of dilapidated and failing housing is determined and its value isdiscounted by applying a reduction factor.

3. The share of residential premises owned by households is determinedseparately for each group of residential buildings. The average annualmarket value of individual and multi-apartment dwellings is multiplied bythe respective shares.

4. The market values of individual and multi-apartment dwellings owned byhouseholds are summed up.

РОССТАТ

12

The scheme of dwelling stock distribution by groupsStone houses, brick houses

un

til

19

20

.

19

21

-19

45

.

19

46

-19

70

.

19

71

-19

95

.

aft

er 1

99

5.

Panel buildings, pre-engineered buildings

Multi-apartment dwellingsMonolithic buildings

Administrative center

of the region

Wooden houses

Mixed, other

Stone houses, brick houses

Panel buildings, pre-engineered buildings

Individual housingMonolithic buildings

Wooden houses

Mixed, other

Stone houses, brick houses

Panel buildings, pre-engineered buildings

Multi-apartment dwellings

Monolithic buildings

Housing

stock

Cities, except for the

administrative center

of the region

Wooden houses

Mixed, other

Stone houses, brick houses

Individual housing

Panel buildings, pre-engineered buildings

Monolithic buildings

Wooden houses

Mixed, other

Stone houses, brick houses

Panel buildings, pre-engineered buildings

Multi-apartment dwellings

Monolithic buildings

Rural area

Wooden houses

Mixed, other

Stone houses, brick houses

Individual housing Panel buildings, pre-engineered buildings

Monolithic buildings

Wooden houses

Mixed, other

РОССТАТ

13

Sources of information about housing prices

Data on prices per unit area of housingin the secondary market, received fromlegal entities and individualentrepreneurs engaged in real estateactivities

wall material:1) large-panel and large-block walls2) brick walls3) monolithic walls

housing categories:1) low quality2) medium quality (standardised)3) improved quality4) elite housing

Results of the cadastral assessment of real estate

properties carried out by the Federal Service for State

Registration, Cadastre and Cartography (Rosreestr)

Prices for 1 m2 of residential buildings located in rural areas, of individual dwellings

of all types based on the materials of external walls, as well as of wooden or mixed material walls of multi-apartment dwellings

РОССТАТ

14

Estimation of fixed capital consumption

Age-efficiency function:

• hyperbolic

Liquidation function:

• log-normal distribution

Perpetual inventory method

РОССТАТ

15

Imputed value of owner-occupied housing services

at current prices, RUB bn.2017 2018 2019

Intermediate consumption

01Current maintenance costs of owner-occupieddwellings

927.4 933.3 1023.6

02 Net insurance premiums paid by homeowners 19.8 18.9 21.1

03 Total intermediate consumption (01 + 02) 947.2 952.3 1 044.7

Other taxes on production

04 Ad valorem taxes paid by the owners the occupied housing (personal property tax) 36.3 41.8 42.3

Gross surplus

05 Price index in the secondary dwellings market,% 97.7 101.6 104.3

06 The rate of return on the owner-occupied dwellings, % per year 2.5 2.5 2.5

07 The average annual value of housing owned by households, in current prices 121,156.3 124,865.1 131880.7

08 Consumption of fixed capital 2 068.4 2 142.2 2309.2

09 Gross surplus from owner-occupied housing05*06*07 + 08

5 026.4 5 313.1 5 748.4

Output

10 Value of owner-occupied housing services(03 + 04 + 09)

6 009.9 6 307.2 6 835.4

РОССТАТ

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Revaluation in constant prices

1=2+3+4+5Intermediate consumption Deflation by price indices:

2 Materials for the current maintenance and repair of the dwelling

CPI for building materials

3 Services for the current maintenance and repair of the dwelling

CPI for housing repair services

4Technical maintenance CPI for maintenance and repairs for

homeowners

5Net insurance premiums CPI for the voluntary dwelling insurance

against standard risks

РОССТАТ

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Revaluation to constant prices (continued)

6 Other net taxes on production The value of current year housing stock in previous year prices, multiplied by the share of taxes on residential buildings in the value of the previous year housing stock

7 Consumption of fixed capital The value of the housing stock in previous year prices, multiplied by the rate of the CFC

8 Net surplus The value of current year housing stock in previous year prices, multiplied by the rate of net operating surplus of the previous year

9=1+6+7+8 Owner-occupied housing services

РОССТАТ

18

The share of owner-occupied housing services in macroeconomic

indicators, %

in GDP

in final consumption of households

in disposable income of households

РОССТАТ

19

Deflators,%, 2011 = 100

owner-occupied housing services GDP CPI

РОССТАТ

20

Volume indexes, %, 2011 = 100

disposable income of HH

OOH services

GDP

РОССТАТ

21

The share of owner-occupied housing services in regional GDP, %

(2018)

Federal districts Old

methodology

New

methodology

Russian Federation 1.8 6.1

Central District 2.4 6.7

Northwestern District 1.8 7.7

Southern District 2.4 8.3

North-Caucasian District 0.6 8.6

Privolzhsky District 1.3 6.2

Ural District 1.2 6.3

Siberian District 1.5 5.0

Far Eastern District 1.0 4.2

РОССТАТ

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Directions for future research

▪ Inclusion in the value of owner-occupied housing of FISIM estimates formortgage loans

▪ Dividing owner-occupied housing services into actual and imputed

▪ Methods for estimation of housing services for the government andcommunal dwellings, apartments