(Yicai Global) March 10 -- With the gradual recovery of China’s real estate market, private developers have returned to land auctions.

The private builders among China’s top 100 real estate firms spent CNY33.4 billion (USD4.8 billion) buying land last month, up nearly 17 percent from a year earlier, according to data from research firm Yihan Consulting.

Larger private developers such as Xiamen Kunlinchen Real Estate, Binjiang Real Estate, and Weixing Real Estate took part in land auctions in Hangzhou and Suzhou, two big cities in the country’s developed eastern coastal area.

In February, land transactions through auctions in core cities rose 9.2 percent from a year earlier and 52 percent from January, with the average premium at 5.6 percent, higher than in the past, according to Yihan.

Private developers have upped their enthusiasm and spending in Hangzhou’s land auctions, according to a report from Season Capital. As financial support policies continue to gather pace, more leading private firms, even some past debt defaulters, are joining in land auctions. For example, a unit of Central China Real Estate, which once defaulted, secured the rights to develop a plot of land in Zhengzhou, the city where it is based, the report said.

Most private builders stopped investing in land during the past two years when the market was in a slump, and the usual big spenders disappeared completely, with only a handful of those with good financial standing remaining, said Xie Yangchun, senior research director at the China Real Estate Information Research Center.

Besides the general warming of the property market, several other factors have also contributed to the recent pickup in land auction data and participation by private developers, Xie noted, such as the higher proportion of land supplied being closer to a city’s central district, the earlier release of land information, and the lifting of restrictions such as the upper limit of property sales prices for some projects.

With the premium rising on high-quality land in key cities, the market is gradually emerging from its overall downward trend, said Lian Ping, chief economist and head of the research institute under ZhiXin Fund.

But despite the recovery in some key cities, the property markets in most Chinese cities are still under great pressure, and the majority of private developers still have a long way to go repairing their credit, so the sustainability of the recovery remains to be seen, Season Capital pointed out.

Editors: Tang Shihua, Futura Costaglione