Property prices in New Zealand fell by -2.6% in January, compared to December 2010, the fourth month out of the last five that prices have fallen, according to Real Estate Institute of New Zealand Index. The number of properties sold also fell to a record low of 3,252 from 4,397 in December, a drop of 26%.

The weak housing market may prompt the central bank to keep interest rates unchanged until the second half of this year. The New Zealand Finance Minister Bill English said recently that it was possible the country was in a recession in the second half of 2010 after gross domestic product declined by -0.2% in Q3 2010.

The unemployment rate in New Zealand climbed to 6.8% in the fourth quarter of 2010 as the number of people in employment fell by -0.5% or 11,000 jobs.

Most economists now expect the base rate to be left at 3% until September, according to a Bloomberg survey.

House sales fell -11% compared to January 2010, which was the previous record low. Also, during the past 12 months, the number of days needed to sell a house in the country has increased from 43 days to 51.