(Bloomberg) -- Assets held by South Korean households shrank for the first time in data going back a decade after the central bank rapidly raised interest rates, contributing to a correction in the property market.

Total assets fell 3.7% to 527 million won ($399,742) per household in the 12 months through March compared with a year earlier, according to data released Thursday by the Bank of Korea and Statistics Korea. 

Real assets, for which properties represent a major component, led the decline, shrinking 5.9% from a year earlier. Financial assets still expanded 3.8%, though the pace of growth almost halved from the previous period.

Falls in the value of overall household assets can weigh on consumer sentiment and spending, a key prop for economic growth. Last month, the BOK revised its estimate for 2024 growth to 2.1% from 2.2%, citing weakening momentum in consumption and construction investment.

The real estate market in middle- and upper-class areas has regained ground since March even as the BOK kept its policy rate at a restrictive 3.5% after three percentage points of increases between August 2021 and January 2023. The recovery in property prices may have helped support an improvement in consumer sentiment over the summer, but the mood has deteriorated in the four months since August to fall back into prevailing pessimism. 

Four board members remain open to resuming the hike cycle if needed to tamp down inflationary pressure while two say the rate has likely reached its peak.

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