Housing prices dropped in most parts of New Zealand over the last month, offering a glimmer of hope for first home buyers.

interest.co.nz's latest Home Affordability report showed falling prices more than offset rising mortgage interest rates in most parts of the country.

The survey focused on lower quartile selling prices. The lower quartile point is halfway between the cheapest and median price in the data and differs between regions.

Lower quartile selling prices since December dropped in Auckland, Waikato/Bay of Plenty, Hawke's Bay, Manawatu/Whanganui, Taranaki, Nelson/Marlborough, Canterbury/Westland and Southland but rose to set new records in Northland, Wellington and Otago.


The lower-quartile house price average for December in New Zealand was $342,000, up from $340,000 in the previous month.

The fall in lower-quartile house prices in some regions was enough to offset the effect of rising interest rates in December, which overall has made mortgage payments slightly more affordable.

The country's most affordable mortgages for first-home buyers in December were Invercargill, Gisborne, Rotorua, Hastings, Palmerston North, Timaru and Dunedin.

The least affordable were North Shore, Manukau, Rodney, Central Auckland, Waitakere, and Papakura/Pukekohe.

Housing in Auckland, however, remains seriously unaffordable with a lower-quartile selling price of more than $700,000. With a mortgage at that rate costing almost $750 a week on a 20 per cent deposit, coupled with rising interest rates, Auckland housing is out of reach for most young buyers.

"The small dip in prices that occurred in Auckland last month would need to turn into a sustained and substantial correction before it would start taking housing in our largest city back into affordable territory for typical first home buyers," interest.co.nz said.

Auckland Central's current median house price is $978,000.