CHINA’S eastern city of Nanjing said Friday it will limit the highest bidding price developers can offer in land auctions, in an effort to control surging land costs that have been driving up home prices.

    Nanjing’s tightening measure came after another eastern city, Suzhou, imposed a similar cap earlier last week.

    Residential land and home prices in some major second-tier cities have been posting significant rises since the beginning of the year, raising concerns that overheating is spreading outside the top-tier cities of Beijing, Shanghai, Shenzhen and Guangzhou.

    In a Weibo post Friday, Nanjing’s city government said it is introducing tightening measures as it had noticed “high-premium transactions in some land sales and fast rising home prices in some districts.”

    The authority will set a highest selling price for each residential land in popular districts, and end the land auction if the bids go above that price.

    Two land auctions in Suzhou were aborted last Monday, the first day the city imposed the same measure, because bidding offers were too high.

    The next day, eight land parcels were successfully sold at prices close to the highest limit set out by the city government.

    In the year to May 23, 152 parcels of land have been sold at premiums of at least 40 percent and at least 500 million yuan (US$76.23 million), according to a report by realtor Centaline research, far more than the 95 parcels recorded in 2015.

    On Tuesday, eight land parcels in Suzhou were all sold at premiums of at least 100 percent at prices close to the highest limit set out by the city government.

    Of the top 50 land sales by value this year, 72 percent were in second-tier cities, the report said. Nanjing accounted for 13 of the 50 top land sales with another 13 in first-tier cities.

    (SD-Agencies)