The highest price on record on China's mainland for housing land was paid in Shanghai yesterday.

A wholly owned subsidiary of China State Construction Engineering Corp acquired a 114,500-square-meter land plot in the city's northeastern Yangpu District for 3.72 billion yuan (US$544.84 million).

The company, which raised US$7.3 billion in July in the world's biggest initial public offering this year, beat rivals from home and abroad to secure the prime piece of real estate.

The plot in New Jiangwan Town designated for residential development was offered at a starting price of about 15,000 yuan per sqm and was finally sold for 32,484 yuan per sqm.

"It's a super crazy price and will definitely have a great impact on the city's already overheated housing market," said Xue Jianxiong, an analyst with E-House (China) Holdings Ltd, a major real estate services provider.

"With such a high price, buyers will naturally assume that home prices in Shanghai will continue to soar despite the fact that they already stand at record high levels."

However, according to industry experts, the developer may not be able to make a profit from the transaction if homes, likely to include both apartments and villas, built on the plot are sold for an average of less than 50,000 yuan per sqm.

Apartments in New Jiangwan Town fetch about 30,000 yuan per sqm while some villa projects are asking for between 35,000 yuan and 45,000 yuan per sqm.