There could be a rise in the number of property investors heading to the eastern European market in Estonia, as developers take advantage of cheap construction costs.

According to Swedbank, numerous real estate developers are launching residential projects in the country thanks to a combination of stabilisation in the market and low costs.

The head of the bank's real estate development Ero Viik made the comments at a conference aimed at the bank's investors and developers, the Baltic Course reported.

"New developments will reach the market at the end of this year or in the first half of next year and hence it could be considered that the supply of flats in 2010 will be rather moderate," he said.

Furthermore, Mr Viik stated that the general consensus of opinion was that prices had begun to stabilise and would not continue to fall any further.

Earlier this year, Swedish banking group SEB predicted that the Estonian economy would experience growth within the next two years, which would put it in a firm position to adopt the euro in the future.