Local governments sold much less land for real estate development last year as the property sector hit a rough patch, casting a shadow over their financial condition.

New home construction used 151,000 hectares of land in 2014, plummeting 25.5 percent from a year earlier, the Ministry of Land and Resources said in a report.

Earlier data released by the ministry showed land sales revenue still grew by 3.2 percent, but it was a sharp decline from the 44.6 percent rise in revenues generated the previous year during a boom in the property market.

The growth in revenue for a shrinking land area suggests land prices nationwide increased last year. Official data did not show prices in specific areas, but private researcher China Index Academy found that land prices in first-tier cities soared 41 percent, while second-tier cities registered a slump of 4 percent and in third-tier cities it fell 2 percent.

The contraction in land sales is particularly painful for governments in smaller cities and hinterland regions where governments found it increasingly difficult to sell land to developers who fear oversupply in those markets.