WELLINGTON, New Zealand, March 9, 2009 (AFP) - Housing values in New Zealand are continuing to sink and new residential building work is declining at the fastest rate in eight years, new data showed Monday.

A property boom since the beginning of the decade began cooling in 2007 and the slowdown has been intensified by the global economic slump.

Housing values in New Zealand fell 8.9 percent in February from a year earlier, the government agency Quotable Value said.

This was bigger than the decline of 8.3 percent in the year to January, Quotable Value spokesman Blue Hancock said.

"The current economic climate continues to impact the housing market, with job security a concern, and uncertainty over how the current global economic crisis will hit New Zealand," Hancock said.

"Our expectations are that sales volumes will remain relatively low for the rest of this year, with values continuing to ease back marginally."

The economic uncertainty is offsetting the positive impact on housing of falling interest rates. The central bank has cut the official interest rate from a peak of 8.25 percent in the middle of last year to 3.5 percent because of the global financial crisis.

The central bank is due to review rates again on Thursday.

New Zealand went into recession from the start of last year, unemployment has been rising and government finances are falling into the red after years of surpluses.

The downturn is also reflected in the building industry, with the seasonally adjusted volume of new residential building work falling 13.4 percent compared with the previous quarter, Statistics New Zealand said.

The downturn has run for five consecutive quarters since September 2007, when the amount of residential building work was 32.5 percent higher, it said.

For the 2008 calendar year, the unadjusted value of residential building work was 7.32 billion dollars (3.68 billion US), down 14.2 percent on the previous year.