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Stable and Reliable Monthly Repeat Rent Indices: A Robust Approach

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  • Kris Boudt
  • Koen Inghelbrecht
  • Maarten Van Besien

Abstract

Repeat rent indices measure changes in rent prices over time by tracking the same rental units across different lease periods, thereby isolating pure rent inflation unaffected by shifts in housing quality or composition. Their main advantage is that they accurately capture the endof-month cost of private tenancy without requiring additional information on dwelling characteristics. This explains their popularity as an input for the calculation of the consumer price index. A disadvantage is that their traditional implementation using ordinary least squares (OLS) estimation at a monthly frequency shows high sensitivity to revisions as the information in newly signed contracts require updating the prior rent evolution. In an extensive application to Belgian rent price data, we find that, using a robust M-estimator in combination with lease signature dates results in indices that share the same trend, but display significantly lower revision variability than the standard OLS-based indices.

Suggested Citation

  • Kris Boudt & Koen Inghelbrecht & Maarten Van Besien, 2025. "Stable and Reliable Monthly Repeat Rent Indices: A Robust Approach," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 25/1126, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:25/1126
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    File URL: http://wps-feb.ugent.be/Papers/wp_25_1126.pdf
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    References listed on IDEAS

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    3. Chaitra Nagaraja & Lawrence Brown & Susan Wachter, 2014. "Repeat Sales House Price Index Methodology," Journal of Real Estate Literature, Taylor & Francis Journals, vol. 22(1), pages 23-46, January.
    4. Alex Minne & Marc Francke & David Geltner & Robert White, 2020. "Using Revisions as a Measure of Price Index Quality in Repeat-Sales Models," The Journal of Real Estate Finance and Economics, Springer, vol. 60(4), pages 514-553, May.
    5. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
    6. Reusens, Peter & Vastmans, Frank & Damen, Sven, 2023. "A new framework to disentangle the impact of changes in dwelling characteristics on house price indices," Economic Modelling, Elsevier, vol. 123(C).
    7. 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.
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    Cited by:

    1. Maarten Van Besien, 2026. "Reliable Prediction Intervals for Automated Rental Valuations," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 26/1136, Ghent University, Faculty of Economics and Business Administration.

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