Nowcast and Itandi Launch Joint Development of New Leading Rent Index Using Real Estate Transaction Big Data

Nowcast, a Finatext Group company providing financial infrastructure for the AI era, and Itandi, a company streamlining real estate transactions through technology, have begun joint development of a new rent index. The index leverages big data from real estate lease agreements—accumulated through Itandi’s real-time broker site, 'ITANDI BB'—and Nowcast's alternative data analysis technology. Supervised by Tsutomu Watanabe, Professor Emeritus at the University of Tokyo and a specialist in price research, the index is planned for launch as a new economic indicator service.

Background and Objectives The real estate rental market lacks a comprehensive public database, making it difficult for participants to access basic information like rent trends and vacancy rates. Existing official statistics have limitations in reflecting actual market movements in a timely manner. As rent is a significant component of the Consumer Price Index (CPI), the inability to monitor it in real-time has hindered accurate management decisions and precise policy formulation.

This index aims to capture initial market fluctuations, acting as a 'leading indicator' that complements official statistics like the Ministry of Internal Affairs and Communications' CPI by combining Itandi’s primary market data with Nowcast’s analytical technology.

Features 1. Early Detection of Rent Trends: Enables early identification of changes in rent trends that are difficult to capture via CPI. 2. Use of Repeat-Rent Methodology: Tracks rent changes for the same properties over time to grasp recent trends. 3. Analysis of Rent Determination Mechanisms: Allows for detailed analysis of structural differences between new and existing tenants. 4. International Comparability: Compliant with international standards, making it useful as a benchmark for global market analysis.

Analysis Examples 1. Repeat-Rent Index (YoY): Recent year-on-year growth is at +4-5%, suggesting an upward trend. 2. New Rental Contract Trends: Price hikes account for about 60% of new contracts, indicating a strengthening trend of rent increases. 3. Rent Change Rate for New Contracts: The average increase has expanded to about +5%, highlighting a growing trend of rent resets during new contract signings.

Future Outlook Nowcast and Itandi will continue to improve the index's accuracy by expanding coverage and aim to provide evidence-based data to policymakers, contributing to the advancement of EBPM (Evidence-Based Policy Making).