The latest inflation figures published by the Central Statistics Office (CSO) show that the private rents sub index of the Consumer Price Index (CPI) increased by 9.2% in the twelve months to March 2022. The corresponding annual percentage changes, in the year to March, for each of the last five years are set out in Table 1 below.
Table 1: Annual Percentage change in the Private Rents Sub index of the Consumer Price Index, March 2018 to March 2022
Annual Percentage Change - CPI Private Rents Sub index
|
Year to
|
% Change
|
|
March 2018
|
6.4
|
|
March 2019
|
5.6
|
|
March 2020
|
3.1
|
|
March 2021
|
-1.4
|
|
March 2022
|
9.2
|
The private rents subindex in the CPI is compiled from a monthly survey of a sample of letting agents. The survey requires the letting agents to supply the average actual rent achieved for selected property types and the CSO calculates the index by comparing the same property types over time. The information collected from the CSO relates to new and existing tenancies. On the other hand, the RTB measures new and renewed tenancies registered on their national database and calculates the index using a hedonic regression method.
In 2018, the CSO commissioned the Economic and Social Research Institute (ESRI) to conduct a review of the methodologies used to measure the cost of housing, both owner occupied and rented, in official statistics. Funding for this work was provided by the Irish Research Council. The ESRI research team published three papers from this work between January 2020 and September 2021, which reviewed the existing approaches taken by the CSO in estimating the cost of housing in the CPI; examined the administrative data sources on rents available from the RTB; and examined the statistical implications and current feasibility of adopting a rental equivalent approach to measuring owner occupied housing in the CPI. The papers published by the researchers were as follows:
“A review of the methodologies used in compiling owner occupiers’ housing indices”, ESRI Working Paper: www.esri.ie/publications/a-review-of-the-methodologies-used-in-compiling-owner-occupiers-housing-indices
“Estimating the cost of Irish housing for the CPI: A rental equivalence approach”, ESRI Working Paper: www.esri.ie/publications/estimating-the-cost-of-irish-housing-for-the-cpi-a-rental-equivalence-approach
“Rental equivalence, owner occupied housing, and inflation measurement: Microlevel evidence from Ireland” - Journal Article in Real Estate Economics: External link: onlinelibrary.wiley.com/doi/10.1111/1540-6229.12360/
