(Yicai) April 2 -- The record-breaking prices paid at land auctions in major Chinese cities last month signal a rebound in urban land markets, as developers bid aggressively for prime plots following a series of central government policies aimed at bolstering the real estate sector.

C&D Real Estate won the rights to develop a plot in Hangzhou’s Xihu district at auction on March 28, paying CNY88,000 (USD12,100) per square meter, a 110 percent premium.

It was the first time that a builder had paid more than CNY80,000 per sqm for a land parcel in the city, smashing previous records for the third time this year. Binjiang Group bought a plot for CNY70,000 per sqm in March after paying about CNY65,000 per sqm for another in January. Beijing, Chengdu, Shanghai, Suzhou, and other major cities have also set new records in 2025.

The emergence of these new ‘Land Kings,’ a term coined during China's property boom earlier this decade to describe home builders that bid aggressively and pay high prices for land, suggests they are betting on the long-term value and stability of prime urban areas against the backdrop of the market’s broader adjustments.

Most record-breaking plots are situated in prime areas, such as beside the Xixi Wetland Park in Hangzhou or in Beijing’s Haidian district, where the outlook for real estate projects is relatively good, Zhang Bo, director of think tank 58 Anjuke Research Institute, told Yicai.

With the broader market adjustments on-going, developers are going for land in core areas of first-tier cities and leading second-tier cities, said Ai Zhenqiang, chief researcher at the Mingyuan Real Estate Research Institute. By securing these scarce plots, builders aim to fortify their developments against risk, which in turn drives up price premiums, giving rise to more Land Kings, Ai added.

Furthermore, because high-end properties consistently outperform standard residential developments, local governments are releasing more land for upscale projects, those with lower planned floor area ratios.

At 1.98 percent in March, the average planned plot ratio for newly supplied land nationwide was below 2 percent for the eighth consecutive month, according to data from China Real Estate Information. The figure for Shanghai has averaged 1.78 percent so far this year, down from 1.87 percent a year earlier.

As the trend for moving to better homes becomes mainstream, developers can only stay competitive by building higher-quality, costlier homes, said a source at a developer that recently broke the record price paid for land in Shanghai. They added that soaring land costs inevitably drive up property prices, making it essential for builders to invest heavily in premium projects to attract buyers.

Editors: Tang Shihua, Futura Costaglione