House affordability across the country has fallen by nearly 10 per cent in the three months to June and plummeted in some regions over 12 months, according to a report used by the government to defend its housing policy last year.

Massey University's latest Home Affordability Report shows most regions have decreased in affordability in the June quarter, down an average of 9.6 per cent across the country.

The Central Otago Lakes area surpassed Auckland as the most unaffordable place in the country in the index, with a 10.5 per cent decline in the quarter.

In Auckland, affordability fell by 4.5 per cent in the period.

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The index takes into account the cost of borrowing - including as interest levels - along with wages and house prices to track movements in affordability.

The report found affordability in the Northland had plunged 32 per cent in the year to June, Hawke's Bay by 23.6 per cent, and was down 23.2 per cent in the Nelson-Marlborough region.

It was also down 17.5 per cent in the Waikato and Bay of Plenty, and there were double-digit drops in almost every region apart from Auckland (down 5.4 per cent) and Taranaki (down 4.6 per cent).

The Canterbury-Westland area was the only one to improve over the year, up by 0.5 per cent, due to falling median house prices.

"House prices to wages remain very high and this factor continues to place considerable strain on first home buyers," the authors said.

"Median house prices are now over 15 times annual wages for the Central Lakes Otago region, and over 13 times annual wages for the Auckland-Thames-Coromandel region."

The same report last year was used by then Housing Minister Nick Smith to argue houses were more affordable than when National took office in 2008.

But his interpretation was challenged by author Susan Flint-Hartle who said homes were still nowhere near affordable in some areas and that the drop had been driven by a decrease in interest rates, rather than government policy.

AFFORDABILITY OVER THE PAST YEAR:

• New Zealand: down 8.2 per cent

• Northland: down 32.0 per cent

• Auckland: down 5.4 per cent

• Waikato/Bay of Plenty: down 17.5 per cent

• Hawke's Bay: down 23.6 per cent

• Taranaki: down 4.6 per cent

• Manawatu/Whanganui: down 15.7 per cent

• Wellington: down 15.3 per cent

• Nelson/Marlborough: down 23.2 per cent

• Otago: down 14.8 per cent

• Central Otago Lakes: down 10.5 per cent

• Southland: down 16.9 per cent

• Canterbury/Westland: up 0.5 per cent