PROPERTY developers bid aggressively at a land auction in China’s eastern city of Hangzhou on Tuesday, undeterred by the city’s move just two days earlier to restrict home purchases to cool price rises, the National Business Daily reported.

    Five parcels of lands were sold during the first land auction since the second-tier city introduced the restrictions.

    The highest bidding price was more than three times higher than the starting price at 12,800 yuan (US$1,918.32) per square meter, the newspaper reported yesterday.

    “Such a high premium rate indicated that even with restrictions in place, property developers are still quite optimistic about Hangzhou’s housing market. At least they don’t think this round of restrictive policies would limit sales,” Ma Yingshu, general manager at the Hangzhou branch of real estate investment management firm CBRE China, was quoted as saying.

    But Ma warned that risks of asset bubbles have been heightened by demand spilling over from some overheated second-tier cities to even smaller neighboring cities.

    Hangzhou, the host city of this year’s G20 summit and a rising tech hub home to firms such as e-commerce giant Alibaba, saw its home prices jump 22 percent in August from year ago levels.

    The city imposed a ban on second-home purchases Sunday, in an effort to deter speculators and cool prices.

    Levels of unsold homes are shrinking rapidly in Hangzhou as buyers pile in. At the current rate of sales the overhang of new homes would be sold off in five months, the newspaper said, citing a report from the Zhejiang Daily media real estate institute.(SD-Agencies)