(Yicai) July 22 -- A high-end residential property in Shenzhen was auctioned at a premium of over 360 percent, as luxury homes have become a key driver of the local real estate market.

A villa in Banshan Seaview, an apartment complex in the Shekou area of Shenzhen’s Nanshan district, was sold at a price of CNY87 million (USD12.8 million), equal to over CNY300,000 (USD44,300) per square meter, after 167 bids from 18 buyers, according to Alibaba Group Holding’s auction platform.

Another villa in the same apartment complex, with a construction area of about 360 sqm, is on sale for CNY150 million (USD22.1 million) or about CNY416,000 per sqm, according to data from real estate agent Ke Holdings.

New luxury homes have been selling well in Shenzhen, with several record-breaking land auctions recorded in the city this year. Expectations for the property market to bottom out and stabilize have driven more and more customers to turn to auctions because of their lower starting prices.

The performance of property auctions in Shenzhen also indicates that the real estate market is accelerating its bottoming out, and funds are investing in core assets, said Ai Zhenqiang, chief researcher at Mingyuan Real Estate Research Institute. “Auctioned houses are a leading indicator of the real estate market, as the recovery of auctions is usually three to six months faster than second-hand home sales.”

The main reason for the popularity of luxury homes is that they are in short supply, so they boast strong value preservation and appreciation capabilities, marking them highly recognized by the market and a high-quality choice for asset allocation by high-net-worth individuals, said Zou Shaowei, senior researcher at Shenzhen Centaline Research Center.

Editor: Futura Costaglione