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The initial land auction of the Year of the Horse in Guangzhou has set a new record for the minimum starting price of residential properties in a major Chinese city, potentially signaling a rebound in the local real estate market.
A combined commercial and residential parcel in the heart of Guangzhou’s Zhujiang New Town was purchased by a prominent local developer for CNY 23.6 billion (around USD 3.4 billion), representing a 27% premium after 243 bidding rounds, according to the Guangzhou Public Resources Trading Center.
The average starting price for the residential portion was CNY 85,000 (approximately USD 12,375) per square meter, exceeding the previous record of CNY 75,700 per sqm set late last year. This deal ranks as the second-largest in terms of total transaction value, behind a 2009 project in Guangzhou’s Asian Games City that sold for CNY 25.5 billion.
Experts suggest this auction will significantly boost the local property sector’s recovery efforts. Xiao Wenxiao, a chief analyst overseeing Guangzhou-Foshan for a Chinese real estate research institute, commented that Guangzhou’s land market has entered a new growth phase after years of market adjustments, and expects the market to emerge from the doldrums this year.
Typically, January and February are slow months for property sales, with a surge usually occurring in March. With most restrictions on the industry lifted, Xiao believes the land auction results will send positive signals indicating the industry’s recovery is on track.
The land parcel in question was originally a race track but was converted into a commercial hub in 1999, hosting businesses like auto showrooms, home furnishings, and restaurants. In 2021, the city launched a redevelopment plan aimed at transforming the site into a large-scale commercial and residential complex aligned with Guangzhou’s central business district ambitions.
The project will cover about 751,000 square meters, including 498,000 sqm of commercial space, 220,000 sqm of residential units, and 33,000 sqm of public amenities. It will feature a mix of retail outlets, a luxury hotel, and serviced apartments.
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