Private rent indices in Ireland: A brief guide
There has been a bit of confusion on another thread about what the different measures of private rents in Ireland. I’ve put a brief guide together which I hope is informative.
There are three: [*CSO * (https://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=CPM13&PLanguage=0), [*daft.ie * (Irish House Price Report Q4 2022 | Daft.ie), and [*PRTB/ESRI * (https://www.prtb.ie/landlords/rent-index-dec-2014). Before I go through the merits and drawbacks of all I’ll go through the characteristics of a good price index.
**What should a good price index have?
**Timeliness: It should come out as soon as possible after the period surveyed
Coverage: At least a representative sample of the population
Hedonics: the mix of housing should be adjusted for. A slew of four-bedroom properties coming on the market in a particular month by chance should not cause the index to jump
Sub-indices: ideally, sub-indices by type of dwelling and location should be generated
Includes rentals in payment: Ideally, the index should include all rents being currently paid in a particular period, not just new leases
Seasonal adjustment: seasonal patterns should be identified if present and corrected for
Machine-readability: for ease of use, extraction in machine-readable format should be facilitated.
Length: a longer series is more useful
The CSO collect many, many prices to generate the CPI. As such private rents should be seen as a *component *of the CPI rather than as an end product in itself. The methodology documentation is not clear on how they generate the private rent index but I suspect it includes a survey of estate agents for a mix of property types in a mix of locations. The CSO does not produce sub-indices by region or for apartments. The advantage of the index is that it goes back the furthest and can be downloaded.
**The daft index was both novel and useful when it first came out. It uses the population of asking rents on daft.ie, hedonically adjusted. Daft’s coverage of the rental market has been very large for a very long time. Sub-indices by dwelling and area are produced. The (slight) downside is that it only includes asking rents. This has caused it a lot of slagging on the pin over the years, undeserved in my opinion. Asking and actual prices may diverge a little (especially around turning points). But in the long run asking prices are probably an unbiased estimator of actual prices. The only annoyance for me is that it is not downloadable anywhere from what I can tell.
**The PRTB/ESRI index is based on all tenancies registered with the PRTB since 2007. It was first published early 2013. So it has the best coverage of the bunch. It is also hedonically adjusted and sub-indices are produced. Unfortunately it is not nearly as well publicised as either the daft.ie or CSO indices. This is a shame at is probably the best of the lot. The only bugbear is that I cannot download it in machine-readable format anywhere.
FWIW the PRTB are best in class when it comes to innovative use of data by a public sector body. They’ve recently added a facility on their website for you to check average rents by type of dwelling.