* China Dec real estate investment up 12.3 pct on yr * Property sales revenues down 1.3 pct in Dec from yr ago By Langi Chiang and Koh Gui Qing BEIJING, Jan 17 (Reuters) - Annual growth in real estate investment in China, a main driver of the economy, slowed in December to its lowest pace in a year, falling in tandem with property sales revenues, but analysts predict the worst is yet to come. Property investment grew 12.3 percent from the same month a year earlier, down from an annual rise of 20.2 percent in November and 25.0 percent in October and September, according to Reuters calculations based on official data released on Tuesday. Analysts said growth would moderate further in coming months before a possible revival in the latter half of the year, depending on how fast China relaxes its monetary policy to safeguard growth and how much developers cut prices. "Given the sustained property tightening stance and fine tuning of monetary conditions, Chinese real estate investment growth will slow further to around 13 percent in 2012," said Shi Qi, an analyst with CEBM in Shanghai. Real estate investment grew 27.9 percent in 2011 from a year earlier to 6.2 trillion yuan ($977 billion), 13 percent of China's gross domestic product, the National Bureau of Statistics said. It increased 33.2 percent in 2010. The cooling real estate market helped curb annual growth in the world's second-largest economy to 8.9 percent in the last quarter of 2011, its weakest pace in 2-1/2 years, according to other data released on Tuesday. Property sales rose 12.1 percent in 2011 compared with a year earlier, translating into a year-on-year drop of 1.3 percent in December alone, the third straight month of decline. The month-alone data, derived from cumulative figures, could be volatile. SALES SLUMPING Evergrande Real Estate Group Ltd, the second-biggest developer in China by sales value, on Monday forecast flat 2012 sales and said the wider property market would be gloomy in the first quarter, with no improvement until after the Lunar New Year in late January. The developer and many of its peers reported sharp double-digit annual drops in sales in December as the mainland Chinese property market felt the pinch from the central government's efforts to lower home prices and restrict property purchases. However, Ma Jiantang, the NBS chief, downplayed investors' worries about a hard landing in the real estate market and the risks to the banking system and broader economy. "Major indicators for the property sector are still on the rise despite a slowdown in growth," he told a news conference. "They are still positive drivers for Chinese economy." He added the easing numbers showed that China's existing measures to curb property speculation and housing inflation have been effective. Average home prices in China have been falling since October. The NBS is scheduled to release December data on Wednesday. Analysts expect Chinese real estate investment to fall below 10 percent in the first few months of 2012, as China's top leadership has reiterated once and again that it would stick to a tightening campaign against the once-bubbly real estate market in 2012. Property shares in Shanghai, which fell nearly 18 percent in 2011, rose 4 percent on Tuesday, outperforming the gain in the benchmark Shanghai stock index, on hope of a policy relaxation. DETERIORATING OUTLOOK Property construction activities shrank in December, showing that developers are slowing their pace of expansion amid pessimistic views for 2012. Many developers, including Evergrande and Agile, have halted land purchases. Newly-started property construction fell 19.1 percent in December from a year earlier, its first decline since November 2010. Property projects under construction dropped 21.5 percent, compared with a year-on-year rise of 14 percent in November. Developers' slowing activities will probably lead to a short supply of homes in 2013 and a rebound in prices. "Falling new construction means limited supply in months later and will probably reverse the supply-demand relation in 2013," Ren Zhiqiang, chairman of Huayuan Property, said earlier this month. Worrying about their high exposure to the property sector and under the instructions from top leaders, Chinese banks have been cutting their loans to developers and home buyers. The NBS data showed mortgage loans fell 12.2 percent in 2011. Under such a backdrop, Chinese developers will probably have to cut prices further in 2012, grasping their only opportunity when Beijing relaxes monetary policies to spur first-time home purchases in part to protect economic growth. A Reuters poll last week showed that analysts expect average home prices in China to fall between 10 and 20 percent this year, with the biggest declines in major cities such as Beijing as well as highly speculative markets of Ordos and Wenzhou.