The standard explanation for the housing crisis in the rich world is that prices rose everywhere and paychecks did not. The OECD's price-to-income data tells a more uneven story. In South Korea and Italy the gap between prices and incomes has closed since 2015, and across much of the OECD it widened only modestly. At the top of the ranking sits a country few people would name: Portugal.
The metric matters here. Nominal house prices can double while paychecks double too, leaving the buyer no worse off, so the ratio of price to income is the number that tells you whether a market has broken. It measures the years of an ordinary salary an ordinary home costs. The first chart indexes it to 2015, so it shows change rather than level.
The league table, for the decade to 2024.
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Portugal's housing costs pulled furthest from incomes
It is not close. Portugal sits nearly 50 percent above its 2015 baseline, eleven points clear of second-placed Canada, with the United States on 28 percent and Spain on 16. A rising tide would have lifted every boat. This lifted some and sank others, which points away from global credit conditions and toward something more local.
Portugal's housing costs outran Spain and the US
One useful reference point is Spain, which shares Portugal's geography, its 2008 crash and its reliance on tourism. Spain's line hits a ceiling around 2022 and goes sideways, giving back a few points. The United States does much the same, easing from 132 to 128 after the pandemic spike. Portugal's line ignores the ceiling, climbing from 2015 to 2024 with a single polite pause. Out-pricing the country famous for expensive housing is a strange thing to be good at.
These are national figures, and they flatter the cities. In Lisbon and Porto the squeeze is tighter still.
The official explanation is supply, and it deserves to be taken seriously. Portugal is short of roughly 300,000 homes by the Bank of Portugal's estimate, at a moment when the eurozone as a whole sits near balance, and construction responds slowly. At the same time, two other lines were moving. The first is tourism.
Portugal's tourism boom didn't stop at the pandemic
Overnight visitors now run at 29 million a year in a country of 10.5 million residents, and the dip that halved them in 2020 had been fully absorbed by 2022. The second line is migration.
Arrivals from abroad, nearly ninefold in eight years
Inflows of foreign residents ran nearly ninefold between 2015 and 2023. The final year is padded by a one-off clearance of pending permits, and the climb from 2018 is steep without it.
It would not be unreasonable to look at those two charts and conclude the newcomers did it. But Spain receives its share of tourists and newcomers too, and Spain's market went sideways. A chart like this is a room in which several things are on fire, and the temptation is to blame the nearest match. I suspect the defensible reading is the combination: a supply shortfall particular to Portugal, meeting a demand shock of unusual scale, in a market that never stalled.
The detail that lingers is demographic. Portugal runs more deaths than births, with a fertility rate nowhere near replacement, and around a third of its newborns now have a mother born abroad. The same arrivals pressing on the housing market are the reason the population is not shrinking. A government can cool the market or it can keep the population alive, and no amount of construction changes that arithmetic.
So the least affordable market in the OECD belongs to a country that needs the very arrivals it struggles to house. A very Portuguese way to top a chart.
The data: house prices relative to incomes from OECD Analytical House Prices (price-to-income ratio, 2015 = 100); migration from the OECD International Migration Database; tourism from OECD Inbound Tourism; the 300,000-home shortfall from the Bank of Portugal, via the Financial Times. Price-to-income is national, so it flatters the cities: Lisbon and Porto are worse still. Pulled via the OECD SDMX API with oecd-mcp. Explore the housing data yourself on OECD Analytical House Prices, price-to-income ratio.
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P.S. What's the housing story in your country? Hit reply and tell me. I read every response.