Expat Colonialism: Are Foreign Buyers Really Making Locals Homeless?

From Lisbon to Mexico City to Bangkok, locals say expats and foreign buyers are pricing them out. The data is more complicated than either side admits. A clear-eyed look at the evidence.

Published on: April 21, 2026

Quick answer: From Lisbon to Mexico City to Bangkok, locals increasingly say expats and foreign buyers are pricing them out, but the data is messier than either side admits. Foreign buyers are rarely the largest single driver of housing affordability problems, which are mostly shaped by structural under-supply, restrictive zoning, low interest rates, and domestic investment demand; yet in specific hot neighbourhoods foreign demand can be the marginal price-setter, and short-term rentals are a more measurable culprit than foreign ownership itself. Portugal's 2023 removal of real estate from its Golden Visa did not collapse prices, showing the foreign-buyer share was smaller than the political narrative implied. For investors, the backlash is now structural rather than cyclical, so jurisdictional and neighbourhood political risk now sit alongside market risk.

In July 2025, a march through the Roma and Condesa neighbourhoods of Mexico City turned violent. Storefronts were smashed. Foreigners, most of them American, many of them remote workers who had moved south during the pandemic, were harassed in the street. Graffiti calling for the eviction of "gringos" appeared on bilingual coffee-shop windows that two years earlier had been celebrated in lifestyle media as proof of the neighbourhood's cosmopolitan revival.

The Mexican president, Claudia Sheinbaum, condemned the protests as xenophobic. The mayor of Mexico City, Clara Brugada, announced within a week a package of measures including caps on rent increases above inflation and tighter regulation of short-term rentals. Both responses, in their different ways, conceded the underlying point: a growing share of Mexico City's residents believe that the arrival of well-paid foreign professionals has made it impossible for them to afford the neighbourhoods they grew up in.

Mexico City is not the first city where this argument has reached the streets. Lisbon, Barcelona, Athens, Bali, Bangkok, and dozens of smaller destinations have seen versions of the same protest, the same political response, and the same uncomfortable conversation about whether welcoming international capital is compatible with housing the people already there.

The phrase being used, "expat colonialism", is deliberately provocative. It implies a structural pattern of extraction, not just an unhappy side effect of globalisation. Whether the phrase is fair depends on what the data actually shows. And the data, as usual, is messier than either side of the argument prefers.

The Pattern: A Specific Sequence Repeated Across Continents

The mechanics of the complaint are remarkably consistent from one city to another. They unfold in roughly the same sequence:

A city is identified, by lifestyle media, remote-work guides, or government-sponsored campaigns, as an attractive destination for foreign professionals. The selling points are usually some combination of climate, walkability, food culture, perceived safety, and a cost of living that is meaningfully lower than the destination of origin.

A wave of arrivals follows. Some are tourists who extend their stay. Some are formal immigrants on long-stay visas. A growing number, since the pandemic, are remote workers earning Western salaries while living in a non-Western or peripheral-European cost base.

Short-term rental platforms grow rapidly. Apartments that were previously available to long-term tenants are converted to nightly stays, because the same unit can earn three to five times as much that way. The local rental market tightens.

Property prices rise, sometimes sharply, particularly in the most photogenic neighbourhoods. Some buyers are foreigners, some are domestic investors anticipating foreign demand, and some are landlords cashing out at the new prices.

The locals who can no longer afford their neighbourhoods get pushed outward. The neighbourhoods themselves visibly transform: signs in English or French, cafés priced for foreign salaries, traditional businesses replaced by ones that target the new arrivals.

A political backlash emerges. Initially this takes the form of complaints in local media and academic studies. Eventually, in some cities, it reaches the streets. Governments respond with some combination of short-term rental restrictions, foreign-buyer surcharges, golden-visa reforms, and occasionally rent controls.

This sequence is now well documented, but the question of how much of the price pressure is actually caused by foreigners, versus by structural under-supply, monetary policy, or domestic investment behaviour, is where the analysis gets harder.

Portugal: When the Government Believed Its Own Critics

Portugal is the cleanest case study, because the government acted on the foreign-buyer hypothesis decisively enough to test it.

From 2012 onward, Portugal's Golden Visa programme offered residency in exchange for property investment of €500,000 (or €350,000 for renovation projects). Combined with a generous Non-Habitual Resident tax regime, it produced a sustained inflow of foreign buyers, concentrated in Lisbon and the Algarve. Lisbon also became one of the defining post-pandemic destinations for digital nomads, helped by climate, Schengen access, and English-language fluency.

The OECD's 2026 economic survey of Portugal noted that listed Airbnb rentals in Lisbon rose from 18,277 in September 2019 to 21,181 in December 2024, accounting for roughly 7.6% of all dwellings in the urban area. The OECD also flagged research linking the concentration of short-term rentals to local housing prices in Lisbon. In central districts, the housing market was not just feeling tighter, it was being structurally reorganised.

In October 2023, the Portuguese government eliminated real estate from the Golden Visa programme entirely, as part of a broader package called "Mais Habitação" (More Housing). The official rationale was explicit: foreign property investment was contributing to a domestic housing crisis, and the government was redirecting the visa programme toward funds, business creation, and cultural contributions.

Two and a half years later, the test results are partial but informative. Portuguese property prices did not collapse. By April 2025, median bank appraisal values were up 16.9% year-on-year to €1,866 per square meter. The Portuguese property market continued to grow in 2025, with forecasts of 5–8% annual appreciation despite the regulatory change.

This does not mean foreign buyers were innocent. It means the share of total demand that the Golden Visa was generating, even at its peak, was smaller than the political narrative implied. Portuguese housing affordability has structural causes that survive the closure of any single visa programme: chronic under-construction since the 2008 crisis, restrictive zoning, slow planning approvals, and the same low-rate environment that has inflated housing in most of the developed world.

The lesson from Portugal is not that foreign buyers do not matter. It is that foreign buyers were one ingredient in a price story that also included monetary policy, supply constraints, and tourism, and that removing one ingredient did not break the recipe.

Mexico City: Wages Imported, Rents Reset

Mexico City offers a different version of the same problem with a different mechanism. The post-pandemic surge there was not driven by Golden Visas or by foreign property purchases, Mexican rules around foreign ownership remain restrictive in many neighbourhoods. It was driven by remote workers paying Mexican rents on American salaries.

In 2022, Mexico City's then-mayor Claudia Sheinbaum signed a partnership with Airbnb and UNESCO explicitly designed to attract digital nomads. The rationale was post-pandemic economic recovery; the result, three years later, was the protests that followed her into the presidency.

The most affected neighbourhoods, Roma, Condesa, Juárez, Cuauhtémoc, share a profile: walkable, central, well-connected, with the kind of architecture and café culture that translates well to Instagram. Rents in these areas roughly doubled between 2019 and 2024. New residents, often working remotely for U.S. employers, were able to absorb that increase as a fraction of their income that long-term Mexico City residents simply could not match.

The mechanism here is starker than in Portugal. There is no significant foreign-ownership effect in Mexico City because foreigners are mostly renting. The price impact comes from the demand side of the long-term rental market, plus the conversion of long-term units into short-term Airbnb listings. Mayor Brugada's 2025 plan combined rent caps with stricter short-term-rental regulation, attempting to address both vectors at once.

Whether this will work is unclear. Rent control has a long international track record of distorting supply. Short-term rental restrictions tend to migrate platforms rather than eliminate the underlying demand. But the political logic is unambiguous: a city government that does not visibly act on the affordability complaint loses its legitimacy, regardless of the economic merits of the response.

Thailand: The Foreign Ownership Workaround

Thailand presents a third variant, where the formal foreign-ownership rules are restrictive and the actual practice has worked around them in ways that are now under pressure.

Foreigners cannot own land in Thailand. They can own up to 49% of the units in a condominium building, and they can lease land for up to 30 years (renewable in practice, though not legally guaranteed). To buy a freehold villa, foreign buyers historically used a Thai-majority limited company structure, with Thai nominee shareholders holding the 51% Thai share on the foreign buyer's behalf.

The nominee structure has been technically illegal under Thai law for decades, but enforcement was sporadic. In recent years, Thai authorities, under pressure from a property market overheating in destinations like Phuket, Koh Samui, and Pattaya, have stepped up scrutiny. The political logic is similar to Mexico City's: rapid foreign-driven appreciation in coastal areas has made local home ownership in those areas effectively impossible, and the government has responded by tightening enforcement of rules that already existed but had been routinely circumvented.

The Thai case illustrates a different failure mode of the "expat colonialism" framing: the foreign demand is real, but the structural enabler is local, a legal and professional services industry that built workarounds for the formal restrictions, plus a government that for years chose not to enforce its own rules. When the political winds change, the same structures become liabilities, and foreign buyers who acted in good faith on the established practice can find themselves on the wrong side of a sudden enforcement push.

What the Aggregated Evidence Actually Shows

Step back from individual cities and a more nuanced picture emerges:

Foreign buyers are rarely the largest single driver of housing affordability problems. In most cities where the foreign-buyer narrative dominates the debate, structural under-supply, restrictive zoning, low interest rates, and domestic investment demand collectively account for more of the price action than foreign demand does.

But foreign buyers are often the marginal price-setter in specific neighbourhoods. In tightly defined geographic areas, central Lisbon, Roma-Condesa, parts of Phuket, Bali's Canggu and Ubud, the foreign demand share is high enough to set the price at the top of the market, which then pulls up everything beneath it.

Short-term rentals are the more measurable culprit than foreign ownership per se. Conversion of long-term rental stock to nightly stays produces immediate, visible reduction in housing supply for residents. This is true regardless of who owns the units doing the converting.

Policy responses tend to be more political than empirical. Foreign-buyer surcharges (Canada, New Zealand, Australia) and golden-visa reforms (Portugal, Spain, Ireland) have measurable effects at the margin but rarely solve the underlying affordability problem, because that problem has multiple causes.

The backlash is now structural, not cyclical. Even if interest rates fall and supply improves, the political coalition that views international real estate inflows as a threat to local housing is now organised, vocal, and electorally relevant in dozens of countries. Investors who assume the post-2022 wave of restrictions is a temporary overshoot are likely to be wrong.

What This Means for Cross-Border Investors

For someone considering a cross-border purchase, whether for residence, yield, or diversification, the "expat colonialism" debate matters in three operational ways.

First, jurisdictional risk has become two-sided. It is no longer enough to think about whether a country welcomes foreign capital today. The relevant question is whether the political coalition supporting that openness is durable. Portugal's 2023 reform showed that even highly successful programmes can be reversed when the housing-affordability narrative dominates. Spain's 2025 announcement that it would phase out its Golden Visa entirely, including the property-investment route, confirmed the pattern.

Second, neighbourhood selection now carries political risk on top of market risk. The most desirable areas in the most desirable cities, exactly the segments that international platforms tend to surface, are often the same areas where the local backlash is most concentrated. Buying into a "hot" expat neighbourhood at peak price can mean buying into the next round of rent controls, short-term rental restrictions, or foreign-purchase surcharges.

Third, the responsible-investor framing is no longer optional in some markets. Buyers who can show that their purchase contributes to housing supply (new construction, renovation of derelict stock) rather than competing for existing inventory are increasingly favoured by both regulation and reputation. Investors who treat a city as a yield extraction site without engaging with its housing politics are accumulating risk that does not show up in spreadsheets until it suddenly does.

The phrase "expat colonialism" is uncomfortable, and not entirely fair. Most foreign buyers are not extracting wealth; they are participating in markets that locals are also participating in. But the discomfort the phrase produces is itself information. It signals that the political license under which cross-border real estate has operated for the past two decades is being renegotiated, country by country, in real time.

The investors who do well in the next decade will be the ones who read that renegotiation accurately, not the ones who insist that the old terms still apply.

Frequently Asked Questions

Are foreign buyers really causing housing crises in cities like Lisbon and Mexico City?
Foreign buyers contribute to price pressure in specific neighbourhoods, but they are rarely the largest single driver of broader housing affordability problems. Structural factors, chronic under-construction, restrictive zoning, low interest rates, and domestic investment demand, typically account for more of the price action. Short-term rentals (which can be foreign- or locally-owned) tend to have a more measurable impact on housing supply than foreign ownership itself.

Why did Portugal eliminate real estate from the Golden Visa programme?
The Portuguese government's 2023 "Mais Habitação" reform removed real estate as a qualifying investment for the Golden Visa, citing concerns that foreign property investment was contributing to the domestic housing crisis. The programme remains active under fund, business, research, and cultural investment routes.

What happened in Mexico City in July 2025?
Hundreds of people protested in Roma and Condesa neighbourhoods against rising rents linked to mass tourism and digital nomads, with some demonstrators turning violent and harassing foreigners. Mayor Clara Brugada subsequently announced a plan including caps on rent increases above inflation and tighter short-term rental regulation.

Can foreigners actually own property in Thailand?
Foreigners can own up to 49% of the units in a condominium building and can lease land for up to 30 years. Direct freehold ownership of land is prohibited; many foreign buyers historically used Thai-majority limited company structures with nominee shareholders, a workaround that is technically illegal and increasingly subject to enforcement scrutiny.

Is the political backlash against foreign property buyers temporary?
The evidence suggests it is structural rather than cyclical. The political coalition viewing foreign real estate inflows as a threat to local housing is now organised and electorally relevant in many countries. Investors should expect continued tightening of foreign-buyer rules, golden-visa restrictions, and short-term rental regulation through the late 2020s.

Explore global real estate markets with data-driven insights and cross-border investment tools at JanusHermes. Compare property markets across 50+ countries, analyze Golden Visa programs, and make informed international investment decisions.

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.