UPDATE 1-China home prices edge up in December, annual growth rate slumps

(Adds detail, quotes)

* Dec new home prices +0.4 pct m/m vs +0.3 pct in Nov

* Yearly growth in Dec +5.3 pct vs +5.1 pct in Nov

* Tier-2 cities +0.6 pct m/m vs +0.5 pct in Nov

* New private homes in tier-1 cities unchanged m/m vs

* Tier-3 cities +0.5 pct m/m vs +0.4 pct in Nov

BEIJING, Jan 18 (Reuters) - China's housing market picked up slightly in December as mild declines in bigger metropolises stabilized and smaller cities gained some momentum, but price growth more than halved in 2017 as government curbs on speculation took effect. New home prices rose 5.3 percent year-on-year in December, slightly up from November's 5.1 percent increase, but well off the 12.4 percent growth seen in 2016 as the government worked to engineer a soft landing for the soaring housing market.

Average new home prices in China's 70 major cities rose 0.4 percent in December from the previous month, reaching a modest five-month high after growth stabilized for two consecutive months, Reuters calculated from National Bureau of Statistics (NBS) data out on Thursday.

The majority of the 70 cities surveyed by the NBS still reported a monthly price increase for new homes. Fifty-seven cities reported higher prices in December, up from November's 50.

Slightly higher prices outside the major cities could be due to an increase in supply as property developers chased sales targets towards year-end, despite government price caps, property analysts said.

"A shift in government monetary and financial policies has put more liquidity pressure on some developers. It's also becoming clearer to them that the tightening measures will remain for longer than expected," said Joe Zhou, head of research for JLL China, a property services firm.

China's housing market has soared over the past two years, prompting more than 100 cities to impose measures to curtail speculative buying, with Chinese President Xi Jinping reiterating that "houses are built to be lived in, not for speculation."

A softening but still resilient property market, underpinned by steady prices, would please policymakers.

They are keen to keep the market - still a vital source of growth for the economy - stable as they campaign to reduce debt and financial risk nation-wide.

Monthly price rises peaked in September 2016 at 2.1 percent nationwide, but they have since softened only slowly as fear of missing out spooked would-be buyers.

As mega-cities such as Beijing and Shanghai imposed increasingly stringent measures, speculators moved to smaller centers where authorities offered cheap credit and imposed few restrictions in the hope of clearing a glut of unsold homes.

Property prices in China's tier-2 cities, mostly sizable provincial capitals, recorded the strongest growth in December.

They rose 0.6 percent versus 0.5 percent increase in November, the NBS said. Tier-3 cities rose 0.5 percent against a 0.4 percent gain in November.

With official tightening measures widely expected to remain in place, market watchers do not anticipate significant price fluctuations in the year ahead.

"We expect an opposite trend in the year ahead from last year - smaller tier-3 and tier-4 cities will cool quickly and more housing supply will go into bigger cities where demand will catch up," said JLL's Zhou.

China's housing minister said in December authorities would facilitate property purchases by first-time homebuyers and those wanting to improve their living conditions in 2018, signaling policies would continue to accommodate what Beijing deems as "rigid," non-speculative, demand.

China is due to release a flurry of economic data for December and full-year 2017, including property sales and investment figures, at 0700 GMT on Thursday. ($1 = 6.6088 Chinese yuan renminbi) (Reporting by Yawen Chen and Ryan Woo; Editing by Eric Meijer)