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.

The Residential Property Prospects 2008-2011 Report produced by independent forecaster BIS Shrapnel point to the Gold Coast enjoying some of the strongest price growth in the nation for the next three years .

While the 2008-09 financial year is only expected to exhibit moderate growth, 2009-2011 is predicted as a time of rocketing values, with the median Gold Coast house price expected to rise from $475,000 (where it currently stands) to $580,000. Angie Zigomanis, the study’s author has pointed to “The shortage of new properties being built, the strong demand from population growth, both interstate and overseas, and the very low rental vacancy rates on the Gold Coast” as the driving forces behind the expected growth.

There is little argument that with recent interest rate rises and stock market jitters the Gold Coast property market is a buyer’s market at present – but with underlying population growth continuing and rents rising, it may not be for too much longer.

In bullish news, the latest research from Colliers has shown that new apartment sales in the Gold Coast/Tweed area remained steady from September to the end of 2007.  (433, compared to 432 in the June quarter).  The continuing sales have been largely attributed to population growth and continuing investor interest – in spite of rising interest rates.Owner-occupier interest seems to have been strongest in low-medium rise apartments, like Zone (Matthew’s Property Group) in Mermaid Beach and Carrara’s Emerald Lakes (Nifsan) with high-rise favoured by investors – particularly in Broadbeach and Surfers Paradise, with Niceon’s Oracle in Broadbeach achieving over $37m worth of unconditional sales during the quarter.Overall, the results are encouraging, given the amount of negative press the local property market has received of late.  It underlines the fact that even with uncertainty regarding interest rates and the stock market, the greater Gold Coast area’s high migration rate and tight rental market means that both owner-occupiers and investors are continuing to purchase here.

The latest figures from PRD Nationwide and KPMG have confirmed it – the Gold Coast is continuing to grow at breakneck speed. With an annual population growth rate of 3.5%, well in excess of the national and Queensland averages (1.3% and 2.4% respectively), we are expected to reach a population of over 700,000 by 2021. That’s nearly 200,000 people over the next 15 years!

The news is particularly good for local homeowners and investors as well with the Real Estate Industry of Queensland (REIQ) reporting a 9% jump in the median Gold Coast house price for the 12 months to September this year – taking the figure to $436,050. This, coupled with anecdotal evidence from local real estate professionals suggests that even this years’ interest rate rises and the change in government have done little to slow things down.

Gold Coast holiday accommodation and the investor market have been having a great time of it as well, with average room takings for this year’s March Quarter up 22.7% since the same period in 2003, and occupancy rates up 10.6%.

The population growth has created a need for 133 new dwellings every week (that’s 6916 per year), however the annual amount both housing and unit approvals have fallen since 2003, with 3441 housing approvals and 3125 unit approvals registered in 2006. It goes without saying that as long as growth continues to outstrip supply of new property, we can expect to see prices rise further.