Analysis by Banco de Portugal (BdP) reveals that it is enough to have a search for houses online for there to be an upward impact on prices, even without transactions in question. Specifically, the regulator observed a “strong correlation” between online house searches and prices in the Portuguese residential market, according to a report by idealista.

In its financial stability report, the BdP revealed an analysis that compares the evolution of house prices with a housing market demand indicator, the Housing Search Index (HSI), which uses the volume of searches for terms “buying a house” in Portugal (or similar) on Google Trends.

After analysing the evolution of housing prices and the search for online homes from Portugal between January 2004 and August 2023, the Portuguese regulator observed “immediately a strong correlation between the [HSI] index and price variations in the housing market ”, the document reads.

In a second analysis, the importance of external demand for housing was also assessed, measured by research carried out outside Portugal. And it was concluded that “external demand is relevant to define the dynamics of housing prices in Portugal”.

For example, the online housing search indicator (HSI) for the two countries with the highest representation of owner-occupied housing in the Lisbon area (the United States and France) are characterised by a series of variations in housing prices in Portugal. “These indices are strongly correlated with the series of house price growth in Portugal, with correlations of 66 percent and 54 percent, respectively, for the United States and France”.