7 Cities Where Foreigners Now Outbid Locals, and the Quiet Trend Reshaping Cross-Border Real Estate in 2026
The markets that absorbed the most foreign capital are the ones most likely to see restrictive legislation in the next 24 months.
Published on: April 28, 2026
Quick answer: A quiet rotation has turned formerly "expat-friendly" cities into expat-dominated ones, with foreign-buyer transaction shares now ranging from 51% to 78% across seven markets, led by Lagos/Algarve (Portugal) at 78%, Tulum (Mexico) at 71%, and Canggu/Ubud (Bali) at 64%. Locals lose the bidding war less because foreigners are richer and more because of wage-to-price decoupling, currency arbitrage, faster cash closings, and tax dynamics that favor selling to foreigners. The key takeaway for investors: foreign-buyer share is a leading indicator of regulation, once a market crosses 50%, restrictive legislation tends to follow within a few years, so the early-stage markets (several in the Balkans) compound the most.
In Lagos, the one in Portugal, not Nigeria, 78% of all residential property transactions in Q4 2025 closed with a foreign buyer. In a town of 33,000 people. That's not a statistical blip. That's a market that has structurally outgrown its native demand base.
Lagos isn't alone. Across Europe, Asia, and Latin America, a quiet rotation is happening: cities that used to be "expat-friendly" are now expat-dominated, and the ratio is starting to bend politics, regulation, and price discovery in ways most analysts haven't priced in.
We pulled foreign-buyer share data from registries, tax authorities, and notary databases across 50+ countries on JanusHermes. Here's where the numbers actually are, and where the next wave is heading.
The 7 cities
| Rank | City | Country | Foreign Buyer Share | Top Source Countries |
|---|---|---|---|---|
| 1 | Lagos / Algarve | Portugal | 78% | UK, Germany, France, US |
| 2 | Tulum | Mexico | 71% | US, Canada, Argentina |
| 3 | Canggu / Ubud | Indonesia (Bali) | 64% | Australia, Russia, US |
| 4 | Limassol | Cyprus | 61% | Russia (pre-2022), Israel, UK |
| 5 | Mykonos | Greece | 58% | US, Germany, UK, France |
| 6 | Tbilisi (central) | Georgia | 54% | Russia, Israel, Türkiye |
| 7 | Marrakech (medina) | Morocco | 51% | France, UK, Belgium |
A few notes on what this data is and isn't:
- These are share-of-transaction figures, not share-of-stock, the cumulative ownership share is lower in most cases (between 18% and 35%)
- "Foreign buyer" is defined by primary tax residency, not citizenship, so a Brazilian who lives in Portugal and buys in the Algarve counts as Portuguese
- The data covers Q3 2024 – Q4 2025 to smooth out seasonality
Why locals are losing the bidding war
It's not because foreigners are richer in absolute terms. The dynamic is more interesting than that.
Wage-to-property-price decoupling. In Lagos (Portugal), median local annual income is roughly €18,000. Median property price is €425,000. That's a 23x ratio. No mortgage product on Earth bridges that gap for a local buyer. Meanwhile a German retiree with a €280,000 home equity withdrawal arrives as a cash buyer and closes in 30 days.
Currency arbitrage. A US buyer in Tulum is shopping with USD, against MXN-denominated sellers. Even after the peso strengthened in 2024, the buying power asymmetry is enormous.
Liquidity premium. Foreign buyers close faster, with fewer contingencies, and with cleaner financing (or none). Sellers prefer them. That's a market structure issue, not a wealth issue.
Governance arbitrage. In several of these markets, foreign buyers are explicitly more attractive to the seller because of how local capital gains and inheritance taxes work. The seller nets more from a foreign sale than from a local one.
The pushback: cities are starting to fight back
The political reaction has begun, and it will accelerate through 2026:
- Portugal, ended the Golden Visa real estate route in October 2023, restricted Lisbon and Porto short-term rentals, raised property taxes on non-resident owners
- Spain, proposed a 100% tax on property purchases by non-EU buyers, currently in legislative process
- Mexico, Tulum has implemented a "social hotel" tax on foreign-owned short-term rentals
- Indonesia, tightened the Hak Pakai leasehold framework that foreigners use to control Bali property
- Greece, raised the Golden Visa threshold to €800K in prime areas (Athens, Mykonos, Santorini, Thessaloniki)
- Canada (not on this list but relevant), banned non-resident purchases entirely through 2027
Where this leads: the markets that have absorbed the most foreign capital are precisely the markets most likely to see restrictive legislation in the next 24 months. That's not a reason to avoid them. It's a reason to watch the legislative calendar carefully and time entries.
Where the next wave is heading
The pattern of the last 15 years has been: a market gets discovered → foreign buyer share climbs from 5% to 50%+ over a decade → political backlash → new market emerges to absorb the rotation.
Based on transaction velocity, search volume, and infrastructure development on JanusHermes, the cities most likely to enter the top 7 by 2028:
- Mostar / Trebinje, Bosnia & Herzegovina, EU-adjacent, low entry prices, growing Croatian-coast spillover
- Tirana, Albania, coastal infrastructure boom, no buyer restrictions, Schengen track
- Da Nang, Vietnam, South Korean and Australian buyer growth, leasehold reform pending
- Pemba / Diani, East Africa, early-stage, but Italian and German buyer traffic increasing
- Cuenca, Ecuador, US retiree migration, dollarized economy, low cost basis
- Tirana coast (Vlorë, Sarandë), explicitly the next-wave Balkan beach market
- Plovdiv, Bulgaria, undervalued EU asset, post-Schengen entry tailwind
Three of these are in the Balkans. That's not a coincidence, it's the geographic fact that EU-adjacent property at non-EU prices is the trade of the late 2020s.
What it means for investors
Three rules for navigating this trend:
1. Foreign buyer share is a leading indicator of regulation. Once a market crosses 50%, expect new restrictions within 36 months. Underwrite a regulatory haircut into your projections.
2. Liquidity flows where buyers cluster. Markets with high foreign-buyer share are also the markets with the deepest exit liquidity. You can sell to another foreigner. That matters.
3. The early-stage markets compound the most. A market going from 8% to 30% foreign-buyer share appreciates faster than one going from 60% to 70%. Find the ones in the early band.
The mistake most cross-border investors make is showing up to the saturated market three years late, paying the foreign-buyer premium, and then getting hit by the regulatory response. The data tells you which markets are entering the saturation zone and which haven't started yet.
Frequently asked questions
What does "foreign buyer share" mean in this data?
It is the share of property transactions closed by a foreign buyer over Q3 2024–Q4 2025, not the share of total housing stock owned by foreigners, cumulative ownership share is lower, between roughly 18% and 35% in most of these cities. "Foreign buyer" is defined by primary tax residency rather than citizenship.
Which city has the highest foreign-buyer share?
Lagos in Portugal's Algarve, where 78% of residential transactions in Q4 2025 closed with a foreign buyer, in a town of about 33,000 people. Tulum (Mexico) at 71% and Canggu/Ubud in Bali at 64% follow.
Why can't locals compete with foreign buyers?
Mainly wage-to-price decoupling (in Lagos, a roughly 23x ratio of median property price to local income), currency arbitrage, and the fact that foreign buyers close faster with cash and fewer contingencies, which sellers prefer. In several markets, tax dynamics also mean the seller nets more from a foreign sale than a local one.
Are these markets becoming more regulated?
Yes. The political reaction has already begun and is expected to accelerate through 2026, Portugal ended its Golden Visa real estate route, Spain has proposed a tax on non-EU buyers, Greece raised its Golden Visa threshold, and others are following. Once a market crosses 50% foreign-buyer share, restrictions tend to arrive within a few years.
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About JanusHermes: A cross-border real estate intelligence platform covering 50+ countries. The Foreign Buyer Index is compiled from notarial registries, central bank capital flow data, and OECD investment statistics, updated quarterly.
A note on the numbers: where no source is named, the market figures in this article (prices, yields, costs) are indicative estimates compiled from publicly available market data and industry reporting at the time of writing. Markets move and rules change, so treat them as a starting point and verify current figures with official sources before acting on them.
