Buying below market: how to assess whether an auction property is really an opportunity

A property at auction with a starting price well below what is asked on the street always looks like an opportunity. Often it is. Other times, the discount disappears once the works, the taxes and the risk are added up, or once it becomes clear that the reference used did not fit that property.

This guide sets out a simple method for telling the two situations apart, with an official reference and a sample scenario worked through step by step.

This article contains two kinds of figures. The observed ones come from the INE and are identified as such. The scenario ones are hypothetical, chosen to illustrate the method, and do not correspond to any real property or sale.

1. Start with the right reference

The comparison is only as good as the reference. For housing, the official reference closest to the market is the median price per square metre of sales that the INE publishes by municipality, based on administrative information from the Tax Authority.

In Lisbon, in the 1st quarter of 2026, that median was 5,082 €/m², over a 12-month window (observed value). In the same period the median rose 15.2% against the previous year, with 8,095 sales, a sample large enough for the reading to be stable.

Three cautions before using this figure:

• It is a median for the whole municipality. It mixes parishes, ages, typologies and states of conservation that differ widely.
• It is a sale value, not an advertised price. Asking prices in listings can be well above it.
• It has a period. In a market that moves quickly, a reference six months old may already be out of date.

2. Read what the auction is actually asking

In a judicial sale by sealed bids, the process sets a base value, and the value announced for the sale is 85% of that base value, as stated in article 816, no. 2, of the Code of Civil Procedure. In other modalities and other sources (banks, insolvencies, electronic auctions), the rules and the minimums differ, and they are always set out in the notice.

So the first question is not "how big is the discount?" but "discount against what?" The base value is not a market valuation made for you.

3. The scenario step by step

Imagine a two-bedroom flat in Lisbon of 80 m², offered by sealed bids with a base value of 340,000 €. The announced value is then 289,000 € (85%). You plan to propose 300,000 € and estimate 30,000 € of works. All of this is hypothetical.

The proposal alone is 26.2% below the reference. With Stamp Duty and the works, the cost is 18.2% below, that is, at 81.8% of the reference. You still need to add the IMT and the registration fees, which depend on the type of acquisition and the value: calculate them on the property sheet, which applies the tax rules in force.

4. The margin has to survive a worse comparable

The test that most often undoes an "opportunity" is to ask: what if this property is worth less than the municipal median?

If the flat is older, sits in a cheaper parish or in a building without a lift, a realistic comparable may, hypothetically, come in 15% below the median. The reference then becomes 345,576 €, and the same 332,400 € is only 3.8% below it.

The 18.2% margin was, in the end, almost all of the difference between your property and the municipal average. Therefore:

• compare with similar properties, in the same area and in the same condition;
• set the minimum margin you require before you start, rather than adjusting it afterwards once you have become enthusiastic;
• treat the median as a starting point, not as the value of your property: a better property than the municipal average may be worth more, and a worse one, considerably less.

5. The costs and risks that are not in the price

Before making a proposal, confirm:

• Encumbrances and charges declared in the notice and in the land registry certificate;
• Occupation: an occupied property may take a long time to be handed over;
• Real condition: a visit is not always possible; ask and document it;
• Payment deadlines and the deposit required;
• Condominium charges in arrears and who bears them.

Each of these points may be worth more than the apparent discount.

6. How to do this on Rivesta

In the property search, each sheet shows the published prices and what they mean, the stages of the sale, the areas, the declared encumbrances, and an IMT, Stamp Duty and registration calculator with the legal basis for each value. Rivesta's opportunity analysis compares with the market and explains why, but the decision is always yours: confirm everything with the source.

What these data do not say

The INE median describes sales across a whole municipality over a period. It does not assess a specific property, does not reflect its state of conservation, and does not replace a valuation carried out by an expert. The scenario in this article is hypothetical and serves only to show the method.