UPDATE 1-S.Korea c.bank chief: property market stabilising

* Property market stabilising since mid-Sept - c.bank chief

* CD rate has priced in at least one rate rise - analysts (Updates with quotes, details)

SEOUL, Oct 23 - The head of South Korea's central bank said on Friday that the real estate market had been stabilising since the middle of September, reaffirming his remarks two weeks ago that he was less worried about possible asset bubbles.

"The real estate market has been stabilising from the latter half of September and therefore we need to wait and see," Bank of Korea Governor Lee Seong-tae told a parliamentary session.

Lee's surprisingly lukewarm stance presented during his news conference on Oct. 9 has prompted bond and money market investors to sharply reduce their bets that the Bank of Korea would start to raise interest rates this year. [ID:nSEO80574]

Lee had raised the level of concern in August and September about the risk from growing property prices and mortgage loans but toned down his stance in October, saying government lending controls introduced recently may be taking effect.

The three-month certificate of deposit (CD) rate <KRCD=KQ> had risen 40 basis points between early August and early this month but has since fallen back 2 basis points to trade at 2.79 percent by the close of Thursday.

Analysts said the current CD rate priced in at least one rise in the policy interest rate, the seven-day repurchase agreement rate <KROCRT=ECI>, over the next three months.

Lee also kept the door open for tightening at any time by telling the parliamentary session that it would not be desirable for the policy interest rate to be held at 2 percent for an extended period.

But he refused to comment when asked if the Bank of Korea planned to raise the interest rate between late this year and early next year.

December treasury bond futures <KTBc1> were quoted down 15 ticks at 108.19 by 0311 GMT as investors shrugged off Lee's remarks and instead remained cautious ahead of Monday's release of third-quarter economic growth figures.

The Bank of Korea held the rate steady at the record-low level for eight consecutive months after reductions totalling 3.25 percentage points delivered over four months since October last year.

It next reviews the rate on Nov. 12.