Rental Price Index Data Collection

Model Methodology The new methodology, introduced in 2019, uses a multi-lateral regression model, with a fixed-effects window-splice (FEWS) to measure change in rental prices derived from MBIE’s tenancy bond data. Bond lodgement data includes characteristics relating to the rental property, and these feed into the fixed effects model: • tenancy start date • tenancy end date (if applicable) • bond lodgement date • territorial authority • property ID • bond amount • rental amount (per week) • property type The window length used is eight years, plus two additional years which are used for imputation in the stock measure (more below). For example, data from 9 years ago is outside the 8 year window, but will still be imputed for two years from observation, and these imputed values can be within the 8 year window. Eight years was chosen as this was closest to the desired median of at least 3 observations – 3 being the least number of observations needed to be a multi-lateral method. This new method replaced the former (bi-lateral) survey of landlords (the CPI Rent Survey). There were several advantages to adopting this new methodology, including: • lower respondent burden • increased timeliness of indicators for the quarterly rental component of the CPI, enabled by the monthly release • improved population coverage. We did not revise the CPI with the introduction of the new series. This is in line with our policy of only revising the CPI when there is a material reason to do so. Series availability Rent series are available for both a stock and a flow conceptual measure. Both the stock and the flow measures are available nationally, and the flow measures are available for the five broad regions (Auckland, Wellington, Rest of North Island, Canterbury, and Rest of South Island). Calculation methodology Under the Residential Tenancies Act 1986, landlords are required to lodge a bond with MBIE for any new private residential tenancy. MBIE provide anonymised bond data to Stats NZ monthly. Each supply includes all bonds lodged in the previous 10 years (to cover the eight years, plus two additional years needed for the window length and imputation period for the stock measure). In addition, the Tenancy Bonds database is a ‘live’ database and records may be updated at any point in time and there may be delays to lodging and processing bonds which means that more data can become available for more recent months in particular. Upon receipt, the data is cleaned. This involves removing invalid records and records that lack the necessary information to contribute to the model. Tenancy Bonds data includes two reference dates; tenancy start date, and bond lodgement date. The stock and flow measures use different reference dates, which reflects their different uses. There are additional methodological and conceptual differences that result in different processes being applied depending on which series is being calculated; monthly stock, monthly flow, or quarterly CPI measure. Sample size Around 3 – 400,000 bonds are observed in each monthly supply of data (including the current period and 10 back years). Timing of published data We publish the Rent Price Index at the same time as the monthly Food Price Index which is generally within 10 working days of the end of the reference month. en-NZ