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[BEIJING] Authorities in China's capital sold a plot of land at a record 8.63 billion yuan (US$1.39 billion) on Wednesday, underlining resilient demand for property in big cities despite a cooling in the overall market.
Located in the south of Beijing, the plot for mixed residential and educational use was sold at a 22 per cent premium to the starting price, data from the Beijing Land and Resources Bureau showed. The plot is 155,675.9 square metres (1.675 million square feet), the bureau said.
The auction result showed demand for property remained strong in China's big cities, which was in stark contrast with the overall property market.
Property sales in first-tier cities, including Beijing, Shanghai, Guangzhou and Shenzhen, hit the highest level seen in 2014, up nearly 15 per cent, in December from November, according to data from private housing data researcher CRIC.
The stronger-than-seasonal property sales in December point to a recovery in market sentiment thanks to looser housing and monetary policy, with the upbeat momentum expected to swing into 2015.
China's real estate market has been plagued by falling prices and high inventories in 2014 and the market is expected to remain weak well into 2015, according to analysts.
Hit by the downturn, developers are no longer as well funded as before and have become cautious when buying land. The Beijing auction may indicate the worst is over.
Growth in land prices slowed for the second straight quarter in the July-September period as the retreat in house prices spread to the land market.