House prices in Portugal were deemed to be underpriced, according to the Organisation for Economic Cooperation & Development.
Research by the organisation on economic prospects as well as house prices resulted in an indication of where property is overpriced and underpriced.
It said house prices in the UK were about 30% too high.
Commonwealth countries, in particular, were found to have the most wildly overvalued property markets among the OECD countries. They include New Zealand, Australia and Canada where prices continued to rise in all three last year.
The property markets of Ireland, Portugal and Germany were classified as undervalued as against those in France and Norway which remain too high, according to the report.
Surprisingly, Spain also was deemed overvalued by 5%, although it was 12% just a year ago.
The report noted: "House prices and housing investment are now rising in over half of the OECD economies. In Europe, strong house price growth is continuing in Germany (based on data from the big cities) and Switzerland, and has also resumed in the UK, even though UK prices are already above longer-term norms relative to rents and incomes. Markets remain softer in other parts of the euro area, reflecting weak income growth and tighter financing conditions.
"Recent data, however, suggest that the long declines in real house prices in Ireland and the Netherlands may now have started to bottom out.”
The research took into account a comparison of prices with typical wages, as this indicates what a person can afford. It also reviewed how purchase prices compare to rental prices.
