"They broke contracts and were willing to pay penalties because the increased house price will do much more than offset the penalty," Li said.

Penalties for broken sales are usually twice the contract's down-payment, which range from 20,000 to 50,000 yuan. Following the recent land deals in the area, housing increased by around 2,000 yuan per square meter, said Li.

"On March 17 alone, I received five phone calls from clients saying that if buyers didn't raise their offers, they wouldn't sell their apartments," she added.

She told METRO about one seller who decided to hold out for more money. The seller had signed a contract with a buyer, agreeing to sell a 150-sq-m apartment for 2.82 million yuan before Jan 15. The buyer paid a 20,000-yuan down-payment.

After the high-profile land auctions, the seller terminated the contract, realizing the price of the home could increase by 300,000 yuan. After deducting the 40,000 yuan penalty for breaking the contract, the seller will be 260,000 yuan better off.

Many homeowners in Wangjing hope the cost of housing goes up even further.

Zhang Yaru, an IT programmer, told METRO he bought a 97-sq-m apartment for 12,500 yuan per sq m as an investment at the end of 2008. When the price reached 25,000 at the beginning of the year, he considered selling. Then, he decided to wait a little longer after the land auction.

"I learned from a real estate agency that the price could reach 27,000 yuan. If it reaches 30,000 yuan, I will sell immediately," he said.

Li Wenjie, general manager of property agency Centaline China (North China region) said it was common for sellers to break deals when prices were rising sharply, just as it was normal for buyers to pull out when property prices are crashing.

"The phenomenon was quite common last September when housing was going up significantly," he said. The two parcels of residential land that sold in Wangjing recently for high prices were bought by State-owned real estate companies.