This paper analyzes the dynamic relationship between monetary policy, macroeconomic, and financial variables and housing prices in Korea using quarterly data from 1991 to 2008. The used method is steady state Bayesian VAR (Villani, 2009) which is identified by Choleski decomposition supported
by the DAGs (Directed Acyclic Graph) technique as well as usual plausible assumptions about the exogenous status among the variables. The overall estimation results from impulse-response analysis, forecast error variance decomposition, historical decomposition, and conditional forecasts imply that
the variations of real housing prices since 2000 have been more strongly affected by the shocks in real economic variables such as income, housing investment, and households loans rather than monetary policy shock (changes in call rate).