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Towards an index for the rental sector: a model for the Flanders housing market

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  • Paul de Vries
  • Frank Vastman

Abstract

This paper describes the development of a rent index for Flanders, Belgium. This annual index, referred to as the huurprijsindex (rent index), is designed to detect changes in the rent of the overall stock of rental homes. We use the matched model methodology based upon repeat tenancy agreements, analogous to Case and Shillerís geometric repeat sales model, to estimate the rent index. We use recoded data on the tenancy agreements of nearly five hundred thousand rental homes; more than 30,000 representing repeat agreements between 1990 and 2010. The accuracy of the index is determined using the 95% confidence interval. Given our target (a geometric mean index value) and the characteristics of the dataset (large but without property characteristics) our repeat tenancy agreements method seems to be adequate for calculating a rent index for Flanders.

Suggested Citation

  • Paul de Vries & Frank Vastman, 2011. "Towards an index for the rental sector: a model for the Flanders housing market," ERES eres2011_335, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2011_335
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    References listed on IDEAS

    as
    1. Wang, Ferdinand T. & Zorn, Peter M., 1997. "Estimating House Price Growth with Repeat Sales Data: What's the Aim of the Game?," Journal of Housing Economics, Elsevier, vol. 6(2), pages 93-118, June.
    2. Baroni, Michel & Barthélémy, Fabrice & Mokrane, Mahdi, 2004. "Physical Real Estate: A Paris Repeat Sales Residential Index," ESSEC Working Papers DR 04007, ESSEC Research Center, ESSEC Business School.
    3. Robert J. Shiller, 1991. "Arithmetic Repeat Sales Price Estimators," Cowles Foundation Discussion Papers 971, Cowles Foundation for Research in Economics, Yale University.
    4. Bourassa, Steven C. & Hoesli, Martin & Sun, Jian, 2006. "A simple alternative house price index method," Journal of Housing Economics, Elsevier, vol. 15(1), pages 80-97, March.
    5. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-137, March.
    6. Goetzmann, William Nelson, 1992. "The Accuracy of Real Estate Indices: Repeat Sale Estimators," The Journal of Real Estate Finance and Economics, Springer, vol. 5(1), pages 5-53, March.
    7. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    8. Jesse M. Abraham & William S. Schauman, 1991. "New Evidence on Home Prices from Freddie Mac Repeat Sales," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 333-352, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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