On a seasonally adjusted basis, the first-quarter price remained unchanged from three months earlier.

Home transactions tumbled 26.1 percent on-year to 199,483 cases over the three-month period, down below the five-year average of 206,000 cases.

Throughout last year, the country's property market had been on a sharp rise on the back of government-led stimulus packages to boost the sector and the entire economy.

It has lifted reconstruction regulations and eased other financial hurdles to let people easily borrow money and buy or rent houses, with the central bank keeping its key interest rate frozen at a record low level of 1.5 percent.

Against this backdrop, total household debt reached a record high of 1,207 trillion won as of end-2015, while home sales reached an all-time high of 1.19 million last year, spiking nearly 20 percent from the previous year's 1 million.

In order to tackle mounting household credit, which could pose a huge threat to Asia's fourth-largest economy, the financial authorities implemented a tightened mortgage loan screening system that focuses on borrower's ability to repay debts, starting from 2016.

The KDI report said that the government's household debt-controlling policy weighed heavily on the local real estate market in the first quarter.

"Purchasing sentiment was dragged down by the government measures, along with a rising supply of new houses," the KDI said. "But we see the housing market still remains upbeat as household lending will unlikely slow down for a while."

According to recent separate data, outstanding household loans extended by local commercial banks rose 4.9 percent on-month to 649 trillion won as of end-March. (Yonhap)