(Yicai) Feb. 26 -- Guangzhou’s first land auction of the new lunar year has set a record price per square meter for residential property in the Chinese first-tier city, a result that could spark a recovery in its housing market this year.

A land parcel in Zhujiang New Town, the city’s modern central business district, was sold to local developer Yuexiu Property for CNY23.6 billion (USD3.4 billion), a 27 percent premium, after 243 rounds of bidding, the Guangzhou Public Resources Trading Center disclosed yesterday. That is the most since the CNY25.5 billion sale of the Guangzhou Asian Games City project in 2009.

The residential component of the mixed-use plot achieved an average floor price of CNY85,000 (USD12,375) per sqm, exceeding the city’s previous record high of CNY75,700 per sqm set at a land auction in late 2023.

The sale will play a pivotal role in supporting a rebound in the local property market, Xiao Wenxiao, chief analyst for the Guangzhou-Foshan region at real estate think tank Purui Digital Intelligence Technology, told Yicai. It shows that Guangzhou’s land market has entered a new stage following several years of adjustment and is likely to emerge from its downturn this year, he said.

January and February are the low season for property transactions, while March typically ushers in a spring pickup in activity. With most restrictive housing policies now lifted nationwide, land auctions are expected to show positive signs and help lay the groundwork for a broader market recovery, Xiao said.

The auctioned land plot was originally a horse-racing track but was converted into a commercial hub for autos, home furnishing, restaurants, and other businesses in 1999. In 2021, Guangzhou launched a regeneration project for the site, with plans to develop a big mixed-use commercial and residential complex in line with the CBD’s strategic positioning.

The site has a planned gross floor area of 751,000 sqm, comprising 498,000 sqm for commercial use, 220,000 sqm for residential development, and 33,000 sqm for public service and supporting facilities. Upon completion, the project will have multiple components, including a high-end shopping mall, a five-star hotel, and serviced apartments.

Editors: Dou Shicong, Futura Costaglione