Home prices in South Korea have stopped falling after 13 months.

South Korean home prices rose slightly in July after a 13-month decline, data showed Wednesday.

The rise was driven by demand for preferred residential developments in the metropolitan area.

The nationwide home price index, presented by the Korea Real EstateAgency, rose 0.03% in July after falling 0.05% in June and posted a monthly increase for the first time in two years.

Home prices in the capital Seoul rose 0.15%, while the wider metropolitan area also rose 0.15%.

The decline in other regions, however, slowed to 0.09% from 0.13% in the previous month.

Home prices rose faster in Seoul due to recovery expectations, while prices continued to rise in the broader area after flash sales, the agency said.

Kang Min-seok, head of real estate research at KB Financial Group, said "the market probably won't decline sharply again as there is demand for low prices, but at the same time, it can't be taken as a signal for revival or entry into another bull market.

Earlier this year, the government eased financial regulations for homebuyers and introduced temporary mortgages as part of attempts to achieve a soft landing for a falling market.

At the same time as house prices rose in July, there was a fourth consecutive increase in the number of