1. The 12th OECD-NBS Workshop on National Accounts Real Value-added Estimation of Real Estate (LIU Nan, NBS) Comments on paper by Roger Jullion, Statistics Canada October 2008

2. 07/03/2016 Statistics Canada Statistique Canada 2 Real value-added estimation of Real Estate  Measuring housing services in national accounts  NBS estimates of nominal output  NBS estimates of real output  Methods used at Statistics Canada  Suggestions for further development

3. 07/03/2016 Statistics Canada Statistique Canada 3 Measuring housing services in national accounts  Rented vs owner-occupied housing  Production-based and expenditure-based GDP  Rental equivalence approach  User cost approach

4. 07/03/2016 Statistics Canada Statistique Canada 4 Owner-occupied housing services  NBS adopted user cost approach Data problems with rental equivalence approach  Nominal output equal to: Repair and maintenance costs Plus: management fees Plus: depreciation

5. 07/03/2016 Statistics Canada Statistique Canada 5 Owner-occupied housing services  Suggested improvements to nominal series Include property taxes (could be available from municipal records) Include interest on housing loans (could be available from bank reports) Include housing insurance

6. 07/03/2016 Statistics Canada Statistique Canada 6 Constant price estimates of owner-occupied housing services  Nominal owner occupied rents deflated by NBS using the renting price index Problems of consistency between nominal series and the deflator Coverage of renting price index limited to large cities Earlier methodological notes suggested that the construction and installation price index was used as a deflator for repair and maintenance and management fees

7. 07/03/2016 Statistics Canada Statistique Canada 7 Constant price estimates of owner-occupied housing services  Alternative approach proposed by NBS Uses a volume indicator based on the growth rate of urban and rural occupied housing area The housing area projector would exclude improvements made to the dwellings that do not increase the housing area but improve the quality of the dwelling

8. 07/03/2016 Statistics Canada Statistique Canada 8 Method used by Statistics Canada  Rental equivalence approach used for owner-occupied dwellings (estimates done by province)  Adjustments are made for quality changes e.g. size of the dwellings (based on Census information)  Volume estimates for housing services for tenant occupied and owner-occupied housing are based on the growth of the constant price housing stock

9. 07/03/2016 Statistics Canada Statistique Canada 9 Suggestions for improvement  If the user cost approach is continued, the nominal estimates should be increased to include property taxes, interest on housing loans and home insurance  Consideration could be given to using the constant price housing stock derived from the PIM model as a volume indicator for housing services for both rented dwellings and owner-occupied dwellings