Country Guides Country Guide: The Baltic States

Date Published:

18/06/2009

Each of the Baltic States capital cities – Tallinn, Estonia’s capital city; Vilnius, Lithuania’s; and Riga, which is Latvia’s capital - have seen the headlong influx of foreign buyers since the turn of the millennium.

Initially, they swarmed all over the classic old city centre apartments – some in need of renovation; many that were hastily done up by locals and sold on for a hefty mark up.

Next, around mid-2003 onwards, came the new wave of modern residential development. It was these that pushed annual house price inflation soaring to 30 per cent and higher in a quarter in all of the capital cities at one point or another.

The upshot today across most of the larger Baltic States’ cities is large swathes of apartments in the ancient towns and a vast proportion of the new build developments are owned by speculative foreigners who can’t afford to sell at falling prices. Instead, the properties lie empty or are rented on the local market or as holiday lets. If you have cash in your pocket, there are bargains galore to be had – basically you can take your pick and, if you negotiate hard, pay at prices not seen since pre-2003.

If you are looking to buy for culture, the capital cities remain where it’s at. For leisure, head out of town. Jurmala is Latvia’s premier coastal resort. It is home to a 25 mile long sandy beach, backed by a pine forest. Parnu, Estonia’s seaside resort of note, known as its summer capital, is attractive and the bottom has fallen out of the capital market. Average prices plunged by around 30 per cent to end Q3 2008 from a year earlier. Beware also that the summer is very short in this northerly part of the world – and most resorts shut up shop from September to May – which leaves little room to earn any reasonable rental income. For pleasure, though, you’ll do well to better it.