As affordability bites, investor attention may offer clues to Australia's housing market
As affordability pressures, changing investor behaviour and housing market uncertainty dominate the national conversation, research from CQUniversity Australia suggests online search activity could provide valuable insights into how Australians respond to property market movements.Â
A CQUniversity research team comprising Thi Tuyet Anh Nguyen, Associate Professor Garrick Small, Dr Lan Sun and Dr Steven Boyd have found a strong relationship between investor attention and Australian house prices, with online housing searches closely tracking movements in the property market.
The research analysed Google Trends data between 2004 and 2023, examining searches such as 'house price', 'property price' and 'real estate price' and comparing them with Australian house prices. The study found a strong positive correlation between housing-related Google searches and house prices, prompting the research team to undertake a second study to further investigate the relationship.
Speaking on behalf of the research team, Ms Nguyen said the project sought to better understand whether people's online interest in housing was connected to changes in the property market.
"This research aimed to understand whether people's online interest in the housing market is related to changes in house prices in Australia.
"Specifically, we examined whether Google search activity could provide useful insights into housing market trends."
The idea emerged from the growing role online information plays in property decisions.
"Housing is one of the biggest financial decisions Australians make, and people increasingly turn to Google for information before buying or investing," Ms Nguyen said.
"This made us curious about whether online search behaviour could tell us something about movements in house prices."
The team's findings suggest that when house prices increase, interest in searching for housing information online also tends to increase.
"Our findings suggest that when house prices increase, people also tend to show greater interest in searching for housing information online," Ms Nguyen said.
"This indicates that online interest may reflect market sentiment, although it does not necessarily mean that searches cause house prices to rise."
While housing research has traditionally focused on factors such as interest rates, inflation and economic growth, the CQUniversity team explored investor attention as an additional factor associated with housing market behaviour. The research is among the earliest Australian studies to examine the relationship between investor attention and house prices using Google search data.
The second study, Dynamic Relationship Between Investor Attention and House Prices: Evidence from Australian Housing Market, found the relationship works both ways, with investor attention influencing house prices and changes in house prices also affecting investor attention.
The research was presented as part of the 30th Annual Pacific Rim Real Estate Society (PRRES) Conference and formed part of Ms Nguyen's Master of Research thesis, Investor attention and house prices in the Australian housing market, completed through CQUniversity Australia's School of Business and Law under the supervision of Associate Professor Garrick Small, Dr Lan Sun and Dr Steven Boyd.
