Rotorua's housing affordability improved last month, following moves by the Reserve Bank to cool rising house prices.

National home loan affordability improved to its best rate in five months as home loan restrictions drove down prices in most areas, the Roost home-loan affordability report has revealed.

The report measured the percentage of after-tax pay needed to service an 80 per cent mortgage on a median-priced house.

Home loan affordability in Rotorua improved from 38.5 per cent in December to 34.7 per cent in January, compared with 41.2 per cent a year ago.

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The median house price in Rotorua rose $11,500 to $265,500 in the month to January, according to latest Real Estate Institute of New Zealand figures.

Rotorua's average weekly pay cheque after tax for people aged 30-34 is now $770.35 - up from $749.09 a year ago.

Ian McDowell, of McDowell Professionals, said there was "good value" property available in Rotorua.

"Our houses are pretty cheap, really."

Mr McDowell said his own sales figures showed a fall in median prices last month.

The drop was largely thanks to more lower-priced properties being sold, he said.

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"Homes are very affordable in Rotorua and [while] the cheaper ones are not in the best areas, they're basically bought as investment properties."

Some local houses sold for less than $100,000, he said.

Nationally, housing affordability improved from 60.7 per cent in December to 57 per cent in January after national house prices dropped $25,000 to $402,000.

The median weekly pay packet after tax for the 30-34 age bracket is now $820.19 up from $799.36 a year ago.

January was the fourth month of the Reserve Bank's lending restrictions on low deposit home loans and come alongside a rise in interest rates ahead of an expected hike in the official cash rate, Roost said.

Roost spokesman David Chaston said there was evidence the lending restrictions were changing behaviour, and slowing overall demand for housing.

" ... the impact is building as banks and buyers get to understand the restrictions.

"It is now more likely these developing trends will improve affordability."

Home loan affordability improved last month in all 24 cities except Whangarei, Napier, Wellington City and Invercargill.

Auckland's North Shore retained its spot as the country's least affordable, requiring 102.1 per cent of an after tax income to afford a house there.

Wanganui was still the cheapest place to buy at 27.6 per cent affordability.