House hunting high and low: Constructing a Housing Search Index for Portugal
Published 11 Aug 2026 · Added to radar 5 Nov 2026
Source abstract
In this paper, we build a Housing Search Index (HSI) based on Google searches made within Portugal that are related to the house-buying process. This index is constructed as the first principal component of a series of search volumes related to house buying, and it is used as a predictor of house price changes. We find that the HSI contains substantial in and out-of-sample predictive information for short-term house price changes, especially in comparison to other predictors usually applied in this literature. The model also suggests that supply variables are not as strong indicators as the HSI. Furthermore, we show that foreign demand, as measured through Google search-based foreign HSIs, plays an important role in explaining Portuguese house price growth rates.
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- Source-reported findings
- We find that the HSI contains substantial in and out-of-sample predictive information for short-term house price changes, especially in comparison to other predictors usually applied in this literature.
- Furthermore, we show that foreign demand, as measured through Google search-based foreign HSIs, plays an important role in explaining Portuguese house price growth rates.