Hangzhou sold four plots of land at an auction on September 10th at prices near the upper end of expectations, adding to tentative signs of a recovery after it relaxed policies to boost demand for housing.
The auction was the mainland city's first since February, when price cuts by two developers triggered a market downturn across the country.
A 43,810 sq metre site in Gongsu district for residential and commercial use was sold for 1.6 billion yuan (HK$2 billion), 12 per cent higher than the reserve price set by the local government.
Winland won the site after outbidding Shanghai-based Greenland Group, one of the mainland's top five developers, after 27 rounds.
Winland is a property investment arm of a Hong Kong financial company. It owns an office building in Beijing's financial district that houses top investment banks such as Goldman Sachs, Morgan Stanley, HSBC and Credit Suisse.
"The result is much better than I expected," said Zhou Chen, a senior manager with consultancy Century 21 China Real Estate in Hangzhou. "The local government must have done a lot of work to make the auction successful."
The three other plots of land sold were at prices near the reserve. DoThink, one of the two developers that first cut prices in Hangzhou, bought a residential site of 52,064 sq metres for 1.27 billion yuan.
Hangzhou's property sales hit the highest level this year last month after the city government relaxed home purchase restrictions.