(Yicai) July 1 -- The residential land area sold in 300 major cities in China fell 8 percent in the first six months of the year, while the average premium paid in land auctions surged due to growing competition for high-quality plots.

The area of residential land traded in the 300 Chinese cities this year reached 250 million square meters as of June 20, according to the latest data from China Real Estate Information. Improved land quality lifted the average premium rate to 9.2 percent from 4.4 percent a year earlier, with a notable divergence in activity between big and smaller markets.

National and regional hub cities saw high-premium land auctions, with a land parcel in Chengdu selling at a 75 percent premium, while Hangzhou frequently saw premiums exceeding 50 percent. A few affluent third-tier cities, such as Wenzhou and Wenling in Zhejiang province, also had land auctions with premiums of as much as 40 percent.

However, land auction activity in most third- and fourth-tier cities has yet to recover, leading to continued dominance by local government investment platforms as backstops. For example, 12 land parcels in Changsha county, Hunan province, were bought at the reserve price by two government-controlled urban investment firms.

Local government investment platforms accounted for up to half of land auction transactions in the first quarter of this year, down from 56 percent a year earlier, according to China Real Estate Information.

Editor: Martin Kadiev