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The ceilings will be imposed in Changsha, capital of Hunan
province in southern China.
Xinhua said the rules for the coming auctions is that the
winning price cannot be more than 50 percent above the starting
bid. In the event that more than one developer puts in the
maximum-allowed bid, the winner will be decided by a lucky draw,
the state news agency said.
In June, Changsha implemented caps on home prices, under which
prices are not supposed to be higher than the average new home
price in October 2016.
Local authorities are trying to defuse a property bubble ahead
of a key, once-in-five-years national Communist Party congress
later this year.
New home prices in Changsha rose 18.3 percent year-on-year in
July, according to data from China's National Bureau of
Statistics.
Across the country, property developers have bid aggressively at
local land auctions in recent years, betting that China's
red-hot property market will not collapse.
China's housing market has already shown signs of fading after
both property investment growth and home prices cooled in July
as regulatory curbs continued to bite.
The government or rural collectives own all land in China,
unlike most countries, and parcels it out to developers and
homeowners through long-term leases.
(Reporting by Stella Qiu and Elias Glenn; Editing by Richard
Borsuk)
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