(Yicai) July 24 -- A residential plot in Hangzhou, China's eastern Zhejiang province, was sold at a premium of 59 percent, the highest in the city's land auctions since 2019.

A consortium by local property developers Greentown China Holdings and Canhigh Group bought the land for CNY605 million (USD83 million) after 46 bidding rounds at yesterday's auction, Hangzhou's first in the second half of this year.

Only one other land plot was sold at the auction. Binjiang Real Estate Group, another local builder, purchased it at a premium rate of 23 percent for CNY2.3 billion (USD316 million) after 43 bidding rounds.

The CNY605 million parcel is 22,625 square meters with a planned construction area of 27,150 sqm, meaning that the building density is low and there is no ceiling for the price of new homes built there.

There has been no new land supply in the area where the land sits for three years, and there are no new projects for sale there, Gao Yuansheng, executive deputy general manager at China Index Academy's eastern branch, told Yicai. The land is small, so the auction's starting price was low, attracting many builders and leading to the high premium, Gao added.

Due to the ongoing downturn in the real estate market, Hangzhou ended its 11-year land price cap policy last November by lifting the upper limit on the premium rate in land auctions. However, it kept the price ceiling of new homes in core urban areas.

In addition to easing land auction rules, Hangzhou is also trying to restore the supply and demand balance in the real estate market by cutting land supply. Thirty-four residential plots were sold in the city for CNY59.1 billion (USD8.1 billion) in the six months ended June 30, down 48 percent and 38 percent, respectively, from a year earlier, according to statistics from the China Index Academy.

Editors: Dou Shicong, Martin Kadiev