Recent analysis has shown that housing prices can drop by up to one-point-four percent over two years when the key interest rate rises by 50 basis points.

According to a report released by analysis teams at the Bank of Korea on Wednesday, the key rate is expected to continue to climb this year amid a downward trend in housing prices.

In addition to increasing interest rates, the report pointed to other factors that have contributed to the downtrend, such as a perception that housing prices nationwide have peaked as well as toughened regulations on household loans.

However, the teams noted that certain factors could apply upward pressure on prices, specifically noting a sluggish housing supply and the easing of regulations on ownership taxes.

Ultimately, the report concluded that the downward trend is likely to become more pronounced as the volatile market situation continues.