LOWER interest rates have fuelled a surge in sales of vacant blocks and house-and-land packages on the Gold Coast, surprising property analysts who are now tipping the end of the bust cycle.

Sales of vacant land rocketed 78 per cent to 383 in the March quarter and there was a 103 per cent rise in house-and-land package sales to 159, according to a Prodap Property Research Market Report released yesterday.

The report warns though that sudden turnaround in demand could lead to another 'under-supply crisis' in early 2011, with developers not expected to release enough new land because of tight financing.

Prodap report author Bill Morris was surprised by the new figures which came on the back of December's record low quarter when sales bottomed out.

Mr Morris said it was not only first-home buyers but a spectrum of purchasers who were taking advantage of market conditions.

He said the lowest interest rates in 40 years was the main stimulant drawing people back to the market, particularly around Gaven and Upper Coomera.

The Reserve Bank's official cash rate target is 3 per cent.

"It's a remarkable situation where we're supposed to be in the middle of a recession but interest rates are so low it's causing interest, finally, in people investing," he said.

"To say it's just due to first-home buyers is not an accurate assessment. It's across the board but still in the lower price range under $500,000."

The highest land sales were at Stockland Trust Group's five projects Pacific Pines (114), Jacobs Ridge (59), The Observatory (34), Highland Reserve (27) and Riverstone Crossing (25).

Stockland secured 67 per cent of the Coast's land market during the March quarter, with 259 sales.