Does GDP count both the investment and the house rental?

Question

Suppose you bought a new house in the year of 2010. Then the price of the house in counted toward the 2010 GDP. Say then you live in the new house in the following years. So in these years, the GDP includes the housing rental you paid yourself. But then why is it not an overcount? I mean, when we counted the house price into GDP in2010, we have already counted all the utility of the house in one year and there is no need to count the de recurring rental.

Comments

I used to work at the Commerce Department, and I am a heavy user of NIPA data.

The treatment of housing investment is consistent with nonresidential investment. Think of production: there is the production of the capital good itself, and then the capital good produces goods and/or services, and that is additional production. So there is no double counting: the production of the house itself and the housing services produced by the house are two different things. Same as the production of (e.g.) an airplane and then the services produced by the airplane.

If you need to understand more about NIPA methodology, I am going to suggestion you will need to spend quality time here: https://www.bea.gov/resources/methodologies/nipa-handbook. FYI, the folks at BEA are wonderfully helpful if you have questions about the data.

Answer 1

I'm sorry. I can't understand very well your question. Maybe that's why it isn't answered yet. Can you reformulate it?

Comments

Oh I'm sorry. Now Daniel answered your question I think I finally understood it. My English is not perfect I have a bad time sometimes. I'm not really sure about the accounting rules concerning realstate industry but I think that the payment the bank does to the company is a different thing from the payment to the bank to cover the loan. I think that accounting should just count interest payments but like I said I'm not very knowledgeable about that kind of accounting.