What Is an Index Lease?

The house rental price index is a relative number that reflects the trend and range of house rental price levels in a certain period of time. The small-scale index takes the rental income of the reporting period as the weight, and the large-scale index and the total index of the city's various types of housing for the year above are used as the weight. The index is calculated using a weighted arithmetic mean.

Housing Rental Price Index

The house rental price index is a relative number that reflects the trend and range of house rental price levels in a certain period of time. The small-scale index takes the rental income of the reporting period as the weight, and the large-scale index and the total index of the city's various types of housing for the year above are used as the weight. The index is calculated using a weighted arithmetic mean.

On July 17, 2018, the Shanghai Real Estate Brokers Industry Association and others jointly issued the "Shanghai Housing Leasing Market Development Report for the First Half of 2018". The report data shows that in the second quarter of 2018, the Shanghai housing rental price index was 1006, up 1.0% from the previous quarter. ^[1-2]

Housing rental price index reflects housing rental in a certain period

On July 17, 2018, the Shanghai Housing Rental Price Index Monitoring Office, which was jointly formed by Shanghai Real Estate Brokers Association, Shanghai Zhonglianlian Information Technology Co., Ltd., Shanghai Normal University Real Estate Research Center and Shanghai Housing Leasing Professional Committee, jointly issued Report on the Development of the Shanghai Housing Leasing Market in the First Half of the Year. The report builds four series of rental price indices for the city, the ring road, the region, the sector, and the community. The 2018 report used big data to collect monitoring data from the five major real estate intermediaries and housing leasing companies in Shanghai, covering about 150,000 units of 9 million square meters of leased housing transactions in Shanghai.

The report data shows that in the first half of 2018, the transaction and price of the Shanghai housing rental market showed a growth momentum, and the supply and demand of the rental market was generally balanced. As housing returns to the function of living, the effect of long-term regulation of the real estate market has gradually become apparent.

Looking at the trend of rents in the first half of 2018, housing rental prices in the first half of 2018 generally showed an upward trend, with a cumulative increase of 2.7%. The specific performance is: the rent index in the first half of 2018 showed an upward trend for two consecutive quarters, the index reached 1006, exceeding the lease price index of the benchmark period by 6 points, of which the rent index in the first quarter was 996, an increase of 1.7%; It was 1006 in the second quarter, up 1.0% from the previous quarter. In the first half of 2018, after experiencing the upward adjustment in the first quarter, due to seasonal factors, the rental price in the second quarter continued the upward trend in the first quarter. ^[1]

The housing rental price index is an index system that reflects the trajectory and development trend of urban house prices. Its establishment is of great significance to solve the problem of scattered, distorted and asymmetric information on housing lease information, activate the real estate leasing market and other related markets, regulate housing management behaviors, guide the healthy development of the real estate industry, and promote economic growth.

Building a housing rental price index is an information channel for people to understand the housing rental market and choose a suitable rental housing. The reflection of the index is timely and highly time-effective. The prices of houses in different locations, different structures, and different living environments reflected in the index are convenient for people to make their own rental choices based on their living habits, housing consumption capacity, and living time. The changing trend of the house rental price indicated by the index curve and index analysis can provide a reference for people to adjust the house method and determine the appropriate lease timing.

The establishment of a housing rental price index is an authoritative reference for investment decisions and intermediary consulting by housing investors and evaluation and consulting agencies. The design of the index system is of a developmental nature and reflects a scientific index that describes the changes in the housing leasing market and the price trend for a period of time in the future. It has a high reference value for investment evaluation and evaluation of housing investors. In the process of collecting and processing the information required by the index, timely exchange of information with the outside world is conducive to the evaluation and judgment of the real estate agency evaluation and consulting agency on the housing rental market.

Establishing a housing rental price index is required for marketization and standardization of housing administration. The pace of China's economic marketization will further accelerate. Understanding the market, serving the market, regulating the market, activating the market, and developing the market have become important responsibilities for administrative management. The housing rental price index can not only reflect the current situation of the market, but also predict the future changes, and implement market monitoring and policy regulation for housing administration.