The Bank for International Settlements published a working paper proposing a probabilistic framework to bridge the gap between near real-time market (asking) rent measures and the all-tenant rents typically captured in consumer price indices, producing a weekly all-tenant rent index for Switzerland to support more timely inflation monitoring. The model constructs hedonic-adjusted, high-frequency asking-rent sub-indices from 3,759,427 Swiss rental-unit listings from Comparis covering 2005 to July 2025, aggregated by canton and room count using population-based tenant weights from official statistics. It then maps historical asking rents into an all-tenant rent series using a duration (survival) model calibrated to official moving rates, and incorporates in-tenancy rent changes linked to Swiss tenancy-law mechanisms, notably adjustments tied to the mortgage reference rate. The resulting weekly index aligns closely with the official quarterly Swiss CPI rent component, with year-on-year correlation rising from 0.86 under the turnover-only version to 0.92 when reference-rate adjustments are included, and reaching 0.98 from 2021 onward; the paper also reports forecast gains of about 25% for the rent CPI component when including asking-rent information.
Bank for International Settlements 2025-12-12
Bank for International Settlements publishes probabilistic model turning asking-rent listings into weekly all-tenant rent indices
The Bank for International Settlements released a working paper introducing a probabilistic framework to create a weekly all-tenant rent index for Switzerland, enhancing inflation monitoring. The model uses hedonic-adjusted, high-frequency asking-rent sub-indices from over 3.7 million listings, mapping them to an all-tenant rent series with a duration model and incorporating in-tenancy rent changes. The index strongly correlates with the official Swiss CPI rent component, improving forecast accuracy by about 25% when including asking-rent data.