Average wages have risen by $845 in the past year but local house prices soared by $16,500, according to a new survey.
The figures have resulted in a decline in housing affordability by 4.8 per cent but a Tauranga real estate agent says there is more to the figures.
Harcourts Tauranga managing director Simon Martin said the median increase may represent a decline in people purchasing the lower price bracket of houses after the LVR restrictions were brought in.
"LVR has held back sales of the lower priced houses, which has moved the median house price up."
The impact of the LVR restrictions on house prices had skewed the figures as the median was not an average but a middle figure, he said.
The gross Waikato/Bay of Plenty average weekly wage for May 2014 was $1005.94, compared with $989.69 a year earlier, Massey University's Home Affordability Report reveals.
But the median house price rose from $319,500 to $336,000 over the same period, with Waikato/Bay of Plenty home affordability declining by 4.8 per cent.
Nationwide, average wages rose by $1795, or $34.53 per week, while house prices jumped $38,000 in the last year, with home affordability deteriorating by 7.6 per cent.
Home affordability is shaping up as a key election battleground with both major parties bickering over how to tackle the country's spiralling housing costs.
Meanwhile, new dwelling consents have risen in Bay of Plenty from 100 to 133 from May 2013 to May this year. Nationwide trends show consents are at their highest level since 2007, despite flattening in recent months, according to Statistics New Zealand.
Bay house hunters who are able to raise a 20 per cent deposit on a median priced local house would be left with a mortgage of $268,800.
Tauranga's Rapson Loans and Finance mortgage broker Chris Rapson said for a borrower on the gross average wage servicing a mortgage of that size, repayments would take a large chunk of their income.
It would only be "marginally affordable" for a couple with one young child but if they had two young children it would not be affordable.
We see a lot of people who we turn away because of those numbers. We say, 'the only way this is going to work for you is to get more income or pay more money and borrow a wee bit less'."
Realty Services chief executive Ross Stanaway said he was not surprised by the figures and said the biggest factor affecting the house prices was the LVR restrictions increasing the initial deposit to 40 per cent.
"I think people who would've been close to affording a home weren't able to after that."
Housing affordability was more dependent on the combined income of the family over the number of children, he said.
Massey's real estate analysis unit used average weekly earnings and interest rate figures from Statistics NZ and the Reserve Bank, and compared those with data from the Real Estate Institute to reach its conclusions.
It showed a national deterioration in home affordability in the past year and a rising gap between house prices in larger urban centres and provincial areas.
Nationally, 2125 new dwellings gained consent in May, including 195 apartments.
The regions with the most new dwelling consents were Auckland, with 611 (including 109 apartments), Canterbury 605 (including 46 apartments) and Waikato 192.
Registered Master Builders Association chief executive Warwick Quinn said he expected 23,000 to 24,000 residential building consents to be issued this year, up from 21,300 last year and 16,929 in 2012.
Auckland and Canterbury still make up nearly 60 per cent of all activity and he predicted this would continue.
Meanwhile, legislation to limit the amount councils can charge in development levies is expected to pass before the general election.
The move is expected to limit the cost of new homes, though interest rates are also tipped to increase.