(Adds financial details, background on property market decline,...

(Adds financial details, background on property market decline, outlook)

Feb 20 (Reuters) - Australian property company Stockland Corporation Ltd (SGP) on Wednesday reported a decline in half-year funds from operations and warned of weaker full-year results due to a steep decline in the residential property market.

Funds from operations (FFO) slipped 6.7 percent to A$407 million in the half-year ended Dec. 31, with the company citing declines in west Sydney and Melbourne land markets.

"We expect further price declines in residential land of about 5 per cent in this calendar year, concentrated in Sydney and Melbourne," Stockland said in a statement.

Citing deterioration in the housing market, reduced credit availability and weak consumer sentiment, the company expects growth in FFO per security of around 5 percent for the full year, at the lower end of its guidance range of 5 to 7 percent.

Australia's once booming property market which long propelled profits for real-estate companies, builders and property classified companies, has hit a slump recently, prompting steep drops in earnings of a large number of companies.

Tighter lending, higher taxes on foreigners and an apartment glut have driven the steepest price drops in a generation in Australia, especially in Sydney where prices have fallen off a cliff.

Australia's property downturn has driven recent earnings downgrades at building suppliers Boral Ltd (BLD) , builder AV Jennings Ltd (AVJ) and property classifieds firm REA Group Ltd (REA) , among others.

Stockland's net profit after tax attributable for the six months ended Dec. 31 came in at A$300 million ($214.92 million), down 56.2 percent from last year.

Total revenue from its residential property segment for the half-year was A$658 million, down from the A$870 million it reported last year. ($1 = 1.3959 Australian dollars)