During the 2000s the Baltic nations became popular investment hot spots after joining the EU. Property prices in the capital cities rocketed as they attracted foreign investment. However, the downturn of recent years hit Latvia, Lithuania and Estonia as hard as anywhere, aIthough the signs are that the worst devaluing of the property is over. Of course, if you're looking to buy for lifestyle reasons, then 2012 would be as good a year as any to pick up your Baltic pad. What follows is an overview of the property market in Latvia, Lithuania and Estonia.

An amendment to the Latvia's immigration law in July last year caused an increase in demand for property there, noticeably from Russian buyers. According to Arco Real Estate, in October 2011 minimum price changes were observed in the standard-type apartment market. The average price of standard-type apartments in October 2011 declined to 583 €/m², while since the beginning of 2011, the average prices of standard-type apartments decreased by 4.3% in total.

Overall, prices in Latvia declined last year and have stagnated. In some areas, price drops have exceeded 7% and any signs of market recovery or growth, at least in the apartment market, are yet to come. Taking October last year, in Riga the total the number of apartments on the market increased by 1.1 %, but in the largest housing estates this number decreased by 2.9%. The number of apartments for sale in central part of Riga increased by 7.6%.

The biggest price drop – of 7.5% - anywhere in Latvia, as of November 2011, was observed in Ķengarags, while the smallest price drop was in Teika, where prices during 2011 declined only by just 1%.

Despite now being a member of the troubled Eurozone, Estonia's property market is showing promising signs after suffering a serious hit after serious growth leading up to 2007. At least 10,000 new residential units in Tallinn were expected to begin before the end of 2011. In the year to Q3 2011, there were 2,245 dwelling permits granted in Estonia, up 21% on the previous year, according to the Register of Construction Works.

In Estonia, apartment prices in capital city Vilnius dropped by 39.4%between December 2007,the highest recorded apartment price level, and December of 2011. During the last month of 2011, positive changes were recorded in Klaipėda only, where apartment prices grew 0.1%. In Kaunas, apartment prices remained stable, while they decreased in the other main Lithuanian cities: 0.1% in Vilnius, 1.5% in Šiauliai, and 0.5% in Panevėžys.

Changes in apartment prices in Estonia's other main cities remained negative and were 1.7% in Kaunas, 2.0% in Klaipėda, 4.4% in Šiauliai, and 1.8% in Panevėžys.