Abstract: Housing consumption is an important part of household consumer spending and GDP. International experience shows that the virtual rent of owner-occupied housing constitutes the main part of the housing consumption. Chinese housing consumption in both urban and rural areas has been underestimated because the traditional accounting methods underestimated the virtual rent of the owner-occupied housing. Based on the data of 2010 provided by the Chinese Family Panel Studies database (CFPS), this paper adopts the rental-equivalence approach to reestimate the housing consumption of urban household, including the owner-occupied housing. The results show that the reestimated value of the housing consumption has increased significantly, but it does not significantly increase the consumption share in GDP. China’s problem of low consumption rate cannot be attributed to systematic underestimation of housing consumption.

Key words: housing consumption; owner-occupied housing; virtual rent