Residential and office buildings under construction in Hefei, China. Reuters

In a further sign of weakness in China's troubled real-estate market, land sales in 300 cities fell by nearly a third in the second quarter from the year-earlier period, as property developers grapple with declining home purchases and prices.

Developers are wary of buying more land and starting new projects, given that many cities face an oversupply of apartments and potential home buyers are sitting on the sidelines.

Land sales in 300 Chinese cities plunged 29% to 247.7 million square meters (2.67 billion square feet) in the April-June period from the year earlier and fell 14% from the previous quarter, according to China Real Estate Index System.

"Since March, China's land market has cooled significantly," a Creis statement said, adding that the premiums paid for land, particularly in smaller cities, have also fallen. The premium is the additional amount that auction winners in an auction pay over the starting price.

In June, the average premium paid for land in these cities was 5%, down six percentage points from May and down seven percentage points from June 2013, the data provider said.

The survey is the latest data showing China's weakening real-estate marketonce a mighty contributor to growth, has weakened. Creis reported Monday that average prices for new homes fell in June for the second month in a row.

Land sales have a significant impact on local property markets. Developers and analysts say that in recent years, local governments in smaller cities released too much land for sale to boost local revenues, contributing to the current glut of homes.

The health of the country's property and land market also affects investment in commodities such as steel and cement and in construction equipment.

"We are definitely more cautious about buying land this year," said Yang Duo, investor-relations manager at Xiamen-based developer Yuzhou Properties. The Hong Kong-listed firm has spent only 510 million yuan ($83 million) on two plots of land, in the cities of Hefei and Quanzhou, in the first half. It bought seven plots for 6.9 billion yuan ($1 billion) for all of 2013.

Financing has gotten tighter too, as the government clamps down on certain lending and a slowing economy means there is less money to go around. That, along with the decline in housing sales, has blunted the enthusiasm of some builders.

"The location of some of the land being released for auction, especially in the smaller cities, isn't that attractive, and prices haven't come down to reasonable levels yet," said Mr. Yang.

Write to Esther Fung at