Following a tough 2008/09 financial year, which saw Sunland announce their first annual loss at $145m, the last 12 months have seen the local developer recover, posting an $18.3m profit for the last financial year.
Rather than pay a dividend to shareholders, the company is looking to the long-term and has elected to continue buying back shares, with plans to purchase another 20% of its own stock in the near future.
Council have released their latest budget, continuing into the 2nd year of the Bold Future city plan.
Highlights include:
For greater details, refer to the Gold Coast City Council website.
The latest report from Australian Property Monitors has revealed a 0.8% fall in Gold Coast House Prices and 3.2% fall in unit prices across the city. This is in stark contrast to strong gains in the capital cities – particularly Melbourne, which has seen 27% and 13.7% increases over the last 12 months for house and unit prices respectively.
Despite the falls, APM have indicated that they expect to see price growth later in 2010.
New valuations of unimproved land value on the Gold Coast has shown a 5% (on average) decline. Prestige and waterfront suburbs were hit hardest with Mermaid Beach, Surfers Paradise and Paradise point down 29%, 18% and 15% respectively.
It was not doom and gloom however, Coomera and Ormeau – outer land-rich suburbs recorded gains of 20% and 15% each. Ten other, similarly categorised suburbs recorded single-digit growth, with the remainder of the Gold Coast static or falling in the last two years.
After putting last year’s property assessment on hold, the Department of Environment and Resource Management will be proceeding with a city-wide valuation check – the first since 2006.
Despite the turbulent market of the past eighteen months, the new valuations are expected to push the average land value in some coastal suburbs, including Mermaid Beach and Surfers Paradise over the $1m mark. Suburbs like Robina and Coomera are also expected to show strong growth.
Used to calculate Council Rates, ratepayers will likely see an increase in their annual bills, with the new valuations expected to come into force June 30 2010.
Despite a 2.3% fall over 2009, the median house price in Surfers Paradise ($1.3m) has come in as the highest in the stage. On the national scale Surfers Paradise only ranks at 54 – with the exclusive Perth suburb of Peppermint Grove dominating the list with a median house price of $5.4m. Sydney’s Bellevue Hill and Vaucluse rounded out the top three at $3.25m and $3.16m.
Mermaid Beach, which includes ‘Millionaire’s Row’ Hedges Avenue experienced a 26% fall over the same period, to come in 2nd on the Gold Coast at $1.08m.
In a widely tipped move, the Reserve Bank has left interest rates unchanged – with the cash rate sitting at 3% despite weaker employment data.
The decision leaves the door open for further cuts later this year should the economic situation worsen.
In the aftermath of Monday’s 20% drop in share price, Sunland have hinted at a share buy-back in the near future. This news reversed the negative market sentiment, with Sunland shares up 15% over Tuesday and Wednesday.
Cashed-up, and still on track to reach the forecast record underlying profit of $109m for 2008-09, the share slide was sparked by the announcement that the company would write down over $40m in property assets this year, and cut interim dividends by over half.
New data from the Residential Tenancies Tribunal in Queensland has revealed that the Gold Coast is now, on average, a more expensive place to rent than anywhere else in the state – particularly for those looking to rent houses.
Housing Minister, Robert Schwarten said in a statement that in the year to September 2008, in Brisbane “The cost of renting a three-bedroom house in Brisbane rose from $325 to $360, a hike of 10.8 per cent, while a two-bedroom unit rose 13 per cent from $305 to $345 a week.”
This is compared to the Gold Coast where two-bedroom unit rentals have jumped from $310 to $340 a week (9.6% gain) and three-bedroom houses have increased $30 per week, or 8.3% to $390.
While the news is not great for those looking to rent, coupled with recent interest rate falls, it is music to the ears of property investors – and given the continuing forecast undersupply of property in south-east Queensland, it is likely that rents will continue to rise.
In new data released by the Housing Industry Association, new home building is predicted to fall by around 20% state-wide in the December quarter. On the Gold Coast however – one of the state’s fastest growing area – the fall is tipped to be as high as 30%. This drop will contribute to a state-wide shortage of 11,000 homes in this financial year alone.
Instead, Queenslanders are renovating more, with a 19% increase in renovations over the past three years and predicted increases of around 13% for the next three.
This information conincided with figures from the Australian Bureau of Statistics showing a 32% fall in the number of Queenslanders taking on mortages in the year from June 2007 to 2008.
With the region – and indeed the entire state – experiencing record population growth and low rental vacancy, these trends will only worsen the housing shortage and cause vacancies to fall and rents to rise further. While the figures are perhaps daunting for those who are currently renting and potentianl new home buyers, those already in the market look set to enjoy strong future capital or investment income growth.
