(Yicai) July 3 -- Hangzhou, the capital of China’s eastern Zhejiang province, earned the most of any city in the country from the sale of land for housing development in the first half of the year, underpinned by widespread auction premiums and strong demand for prime, centrally located plots.

The proceeds of Hangzhou's residential land sales stood at CNY116 billion (USD16.2 billion) in the six months ended June 30, just shy of the CNY116.9 billion it earned in the whole of last year, according to figures from the local branch of property market data cruncher Beike Research Institute.

The proceeds of the city's total sales of land for development exceeded CNY122.8 billion in the period, ranking second only to Shanghai at CNY127.3 billion, per data from the CRIC Research Center.

The strong upswing came mainly as a result of premium‑priced land. All six plots auctioned late last month went for more than their reserve, including one at a record‑breaking 68 percent premium. It fetched CNY54,000 (USD7,540) per square meter.

Hangzhou's land market has been characterized by real estate developers buying more and better, paying an average premium of 39 percent, Shangguan Jian, dean of the Hangzhou Beike Research Institute, told Yicai. And the market continues to bifurcate, with plots in central areas in greater supply and commanding high premiums and setting record prices, while outlying areas are seeing fewer offerings and lower premiums, he noted.

Because the recently auctioned plots were concentrated in prime central locations and developers are targeting buyers with deep pockets and a desire for better homes, such land parcels remain popular even though prices are climbing, a local real estate market insider told Yicai.

For example, two luxury housing projects with about 500 units in total were put up for sale in Hangzhou late last month. They sold out on the opening day, with each unit going for over CNY10 million (USD1.4 million) at an average price of CNY65,600 and CNY59,000 (USD9,160 and USD8,240) per sqm, respectively.

Given this trend, the market expects a large number of high-quality housing projects to be launched in Hangzhou in the near future, which will continue to drive up property prices, the insider noted.

Editors: Tang Shihua, Futura Costaglione