UPDATE 1-Singapore home prices in steepest drop since 1975

*Private home prices fell 13.8 pct in Q1 from Q4

*Homes in central areas show largest decline

*Analysts expect further fall, but pace of decline may ease (Adds details, comments)

By Kevin Lim

SINGAPORE, April 1 (Reuters) - Singapore private home prices suffered their biggest drop in more than 30 years in the first three months of 2009 as the country's worst-ever recession hammered investor sentiment in the recently booming property market.

Home prices fell 13.8 percent in the first quarter of this year compared with the previous quarter, the Urban Redevelopment Authority said on Wednesday, more than twice as much as the 6.1 percent drop in October-December 2008.

The fall marked the third straight quarterly drop and was the steepest fall since the second quarter of 1975, URA said.

Shares in Singapore property firms such as CapitaLand (CATL.SI) and City Developments (CTDM.SI) shrugged off the gloomy market data in spite of analysts saying the drop in the URA's private residential property price index had been steeper than expected.

"The trend is clearly downward," said Colin Tan, head of research and consultancy at Chesterton Suntec, a real estate consultancy. He said the sharp drop in the index showed momentum was strong and that home prices will fall further before they find a bottom.