Hitotsubashi University and Daiko Rental Develop New Rent Indices for Sustainable Housing Market

In a significant step towards enhancing the transparency of Japan's rental housing market, Hitotsubashi University, alongside Daiko Rental Co., Ltd., has developed two novel rent indices: the Hitotsubashi University-Daiko Rental CPI-based Rent Index and the Hedonic Rent Index. This collaboration aims to construct a sustainable rental housing market and provides a robust framework for studying rental dynamics across the country.

Background of the Joint Development

The need for reliable rent indices has grown, especially in light of the existing data provided by the Ministry of Internal Affairs and Communications. Currently, private-sector rents comprise about 20-30% of household expenditures, yet the privately measured CPI rent index has shown minimal fluctuations, raising concerns of divergence from actual market conditions. Recognizing this gap, Hitotsubashi University and Daiko Rental united their expertise to develop two comprehensive rental indices using extensive rental data from over 1,350 municipalities and 1.28 million properties managed by Daiko Rental.

Overview of the Indices

1. Hitotsubashi University-Daiko CPI-based Rent Index
This index utilizes data from the rental properties managed by Daiko Rental, employing a calculation method akin to the Ministry's existing CPI rent index. Corrections are made based on property size and structural type (wooden vs. non-wooden), ensuring that the index reflects variations in the housing stock. Despite using similar methodologies, the differences in sample size and survey scope create a unique index behavior compared to the official CPI rent index. Scheduled for a nationwide release in August 2025, this index will be available monthly, covering 49 indices including the Tokyo Metropolitan Area and prefectural distributions.

2. Hitotsubashi University-Daiko Hedonic Rent Index
This innovative index leverages the hedonic pricing methodology to account not only for property size and structure but also other factors such as age, floor levels, and resident amenities, further refining the rental price determinations. It utilizes data solely from rental contracts signed within the month, excluding properties currently occupied. This approach allows for a quicker reflection of rent trends in the market, making this index an invaluable tool for academic and market analysis, although public access is not planned at this time.