We all want to know what's ahead for house prices, don't we?
The ANZ has been working on some new models for predicting house prices and have recently introduced the ANZ Housing Search Index constructed using Google searches. 
They see this as a leading gauge for dwelling prices in Australia - one that looks forward as opposed to most models that look at past data.
And the good news is...
The index suggests Australia’s house prices may stabilise later this year, consistent with the message sent by auction clearance rates.
The ANZ explains that it is early days, so they're not getting too carried away with the signal.
USING GOOGLE TO FORECAST HOUSE PRICES
Google Trends, available since January 2004, provides daily and weekly reports on the volume of queries related to various industries.
Significant research has shown that this data may correlate with the levels of economic activity in given industries, and thus may be helpful in predicting macro indicators.The ANZ model uses Google Searches to gauge the trend in dwelling prices in Australia.
The rationale behind their approach is that Google searches are able to gauge “collective wisdom”, revealing sentiment towards a given market, such as housing.
For example, a surge in searches on the topic of “Stamp Duties” may indicate that interest for buying a property is heating up, and so presage a rise in house prices.
METHODOLOGY
The ANZ Housing Search Index involves three steps:
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They use Google search trends in Australia since 2004 for topics that one would be most likely to search for when buying a property (“stamp duties”, “mortgage loan comparison”, “auctions today”, “moving company”, etc)- They then standardise each index and aggregate the results into a simple sum
- ANZ seasonally adjust the data and, due to the volatility of the underlying time series, we take the trend series.
They use Google search trends in Australia since 2004 for topics that one would be most likely to search for when buying a property (“stamp duties”, “mortgage loan comparison”, “auctions today”, “moving company”, etc)The 3month/3month change in the ANZ Housing Search Index is able to track the quarterly change in Australian dwelling prices with some precision and with the added benefit of a three month lead (Figure 1).
The y/y change in the index can track annual shifts in housing prices, three months in advance.
As illustrated in Figures 1 and 2, the ANZ Housing Search Index has been slowing throughout 2018 but it has more recently ticked higher – suggesting a jump in interest in house buying and hinting that near-term stabilisation in housing prices may be on the cards.
The very recent stabilisation of the auction clearance rate is consistent with our search indicator.
In both cases, the sign of improvement is at a very early stage so we are cautious about over-interpretation.
Still, these are encouraging early signs.
The Bottom Line: 
ANZ believe that Google Trend searches can be a useful gauge of housing prices in Australia.
Indeed, rising internet searches related to home buyers’ interests tends to signal a pick-up in dwelling prices over the three following months.
In the words of a great man I know...."Let's see!"
