The OECD has put a number on something anyone flat-hunting in Lisbon or Porto already knows in their bones: Portuguese property has become disconnected from what Portuguese people actually earn. In its Economic Surveys: Portugal 2026, published in January, the organisation warns that house prices have doubled over the last decade, well outpacing incomes, and flags the country as one of the hardest places in the developed world to find an affordable home.
For foreigners weighing a move or a purchase, this isn’t background noise. It’s a signal that the market you’re buying into is priced for continued momentum — and that momentum is now attracting formal warnings from Brussels, the OECD and Portugal’s own central bank.
What the OECD actually found
The Survey’s housing chapter is blunt. It notes that from 2000 until 2013 house prices declined, but since 2013, growth in house prices has outpaced most other euro area and OECD countries. The OECD’s economists — writing separately on the organisation’s Ecoscope blog — put the human cost in plain terms, noting that 44% of respondents in a 2023 survey considered leaving Portugal due to difficulties finding affordable housing.
Crucially, the OECD is careful not to pin the blame on any single cause. It states that Portugal’s housing pressures did not emerge overnight and cannot be blamed solely on the spread of short-term rentals or golden visa programmes — they result from several long-standing issues, including a collapse in construction during the economic crisis and high construction costs. The report does acknowledge foreign demand as a contributing factor rather than the root cause: empirical analysis linking the Golden Visa programme to stronger price growth for properties around the €500,000 threshold, though the average price of real estate sold was much smaller, at about €113,000 in 2020.
This lines up with a parallel warning from the European Commission. Reporting in December 2025, Euronews noted the Commission’s own assessment that the average overvaluation of housing prices in Portugal is higher by around 25%, surpassing other property markets in the bloc, and that the average overvaluation is most substantial in Portugal, at around 25%, surpassing other overheated property markets in Sweden, Austria or Latvia. Brussels’ data also shows Portugal near the top of a longer trend: the countries with the biggest increases in price-to-income ratios over the last decade were Portugal, the Netherlands, Hungary, Luxembourg, Ireland, Czechia and Austria, with ratios more than 20% higher than ten years ago.
The Lisbon numbers, spelled out
By mid-2026, the affordability gap has widened further. A June 2026 Euronews analysis found that over the past 10 years, Portuguese house prices have risen by almost 240%, while the average Portuguese wage climbed from about €839 a month to €1,333 — prices rose four times faster than incomes. On price-to-income terms, Lisbon and the Croatian city of Split top the ranking, each posting a price-to-income ratio of 18.7, almost double the level considered problematic.
The same piece is careful to add nuance that matters for anyone deciding whether “overvalued” means “about to crash”: Portugal’s housing market may be exceptionally expensive without necessarily being in a classic speculative bubble, though affordability metrics are flashing warning signals. A ratio detached from local incomes doesn’t guarantee a correction — Portugal’s market is unusually exposed to foreign buyers who aren’t constrained by domestic wages in the first place.
Why this matters if you’re buying from abroad
None of this changes the mechanics of buying property in Portugal — you’ll still need a NIF, a Portuguese bank account, and budget for IMT transfer tax, stamp duty and notary costs before the deed is signed. What it changes is the risk calculus. The OECD’s own housing chapter flags a genuine financial-stability angle too: the central bank implemented a sectoral systemic risk buffer targeting residential real estate in 2024 and will introduce a new countercyclical capital buffer from January 2026, and separately warns that household mortgage debt has declined, but new borrowing has increased alongside rising house prices, raising macroeconomic vulnerabilities. That’s regulator language for “we’re watching this closely” — not something to build a purchase decision around alone, but a reason to get independent valuation advice rather than assume prices only go one way.
It’s also worth remembering that buying property no longer grants Golden Visa eligibility, so anyone still shopping with residency in mind should check current routes via our /visas/ hub before assuming a purchase carries any immigration benefit.
What to watch next
Bank of Portugal’s Financial Stability Report, the next OECD monitoring update, and INE’s quarterly house price index are the datasets to track over the coming months — particularly whether construction pipeline growth (licensing rose sharply in 2025) starts to cool price growth as forecasters expect. For now, treat the OECD’s flag as exactly what it is: a structural affordability warning, not a prediction of collapse, and a strong argument for professional valuation and legal advice before signing anything.
Foreign buyers considering a purchase should read our property-buying guidance in the /tax-and-nif/ and /relocation/ hubs, and can get tailored support through /services/ before committing to a reservation contract.
Sources
This article was produced with AI assistance and editorial oversight in line with our editorial policy. It is general information, not legal or tax advice.