China's government land sales revenue slumped further in the first two months of the year, suggesting property developers remain cautious even after authorities stepped up support to help them weather a severe financing crunch.

Revenues from land sales totalled 562.7 billion yuan ($81.82 billion) in the first two months of the year, according to finance ministry data on Friday, falling 29% from the same period a year earlier.

Income from land sales is a major source of revenue for the China's local governments, which play a key role in funding infrastructure projects, one of the biggest growth drivers for the economy. But a sharp slump in the property market last year has added to pressure on those governments, which combined have more than $9 trillion in debt.

The ability of those fiscally stretched local governments to follow through on spending will be a key test for China's modest economic growth target of around 5% this year.

Land sales in 2022 plunged 23% from a year earlier.

Many property developers stopped giving sales targets last year and Longfor didn't give targets this year.

Yuexiu Real Estate, one of the few private developers which bought land last year, has purchased two plots of land in Beijing this year.

The company said on Wednesday it will step up efforts to purchase land in the next several years, whether in Shenzhen, Shanghai or Beijing, as core cities, with the economy definitely being taken as a key consideration.

Land sales will remain sluggish, particularly for fundamentally weaker provinces, Moody's said in a report.

"Consumer concerns about employment, property prices and project incompletion risk will constrain property sales. We expect nationwide contracted sales to decline 10%-15% in 2023, further dampening demand for land."

Data this week suggested the property sector is climbing out of its prolonged slump, with much narrower declines in home sales, developer investment and construction starts in the first two months of the year. Home prices also rose for a second straight month.

But analysts say it will likely take many more months before the broader sector returns to growth. ($1 = 6.8776 Chinese yuan renminbi) (Reporting by Liangping Gao and Ryan Woo; Additional reporting by Clare Jim, Editing by Toby Chopra and Kim Coghill)