Fast-rising house values are earning owners more from their properties than from their jobs, with most suburbs seeing $100,000+ annual growth.
Kelvin Davidson, chief property economist at CoreLogic, said the latest value growth data shows many owners are "earning more on paper from simply having a property than going to work every day".
Values were up by $100,000 or more annually in 771 out of 983 New Zealand suburbs in the year to August, despite Covid, lockdowns and shut borders.
And one suburb's home value rose annually by almost $600,000.
"The mentality of a house earning more than you do - you might not be upset if you own one, but if you don't, it's certainly demoralising," Davidson said.
He cited Infometrics' second-quarter data showing the national median household income was $93,894/year, while Auckland's is $121,500/year.
"There's plenty of suburbs that have a median property value which has gone up by a lot more than annual household incomes over the last year. It all depends on your perspective whether you're upset about this or not."
Davidson warned homeowners about being too joyful: "This is paper wealth is effectively coming at the expense of non-owners. Unfortunately, for would-be first home buyers, our latest data refresh highlights yet again the challenges they face."
Investors were continuing to collect rent, tenants were staying at work and paying that rent but those landlords were really making substantial capital gains from value rises, he said.
Owner/occupiers were not necessarily any better off because, if they sought to sell and buy another house, they were often borrowing more to get the next property.
"The mentality is great for people in the market. For those not in the market, it's not so great and this reflects the affordability challenge and the gap between the haves and have-nots has got wider," he said.
The Reserve Bank said that from November 1, it will restrict the amount of lending banks can do above an LVR of 80 per cent to 10 per cent of all new loans to owner-occupiers, down from 20 per cent at present.
It expects house price inflation to moderate significantly "and are assumed to eventually fall as momentum in the housing market fades".
Davidson said that LVR change would hit first-home buyers because they're the ones using low-deposit finance "and it's just another blow. House price inflation will slow," he said, forecasting it to fall back to 0 to 2 per cent minimum and 6 per cent maximum in the next year to 18 months.
Westpac has also forecast house price growth to slow sharply. Acting chief economist Michael Gordon said this month: "Our view remains that a meaningful cooling in house price growth will require higher interest rates. Mortgage rates have already moved off their lows to some degree, though more so in the longer, less popular fixed terms."
CoreLogic's data showed only 24 suburbs had price increases of less than $50,000.
In Auckland, 37 suburbs out of 208 had a median value under $1m. Ten suburbs have a median of less than $800,000.
Only 150 suburbs had a median value of -$500,000: 61 in the North Island, 89 in the South Island. That is almost half the number of a year ago.
Herne Bay remains the most expensive suburb, with a median of $3.25m and Ponsonby values rose the fastest, up $597,550.
In Hamilton, all suburbs gained at least 14 per cent. Four $1m-plus suburbs were topped by Harrowfield at $1,06m. Bader is cheapest at $580,550.
Davidson said the smaller dollar gains in values were mainly in the South Island.
Tauranga's $1m-plus suburbs was three in June but is now eight with Mount Maunganui most expensive at $1.33m.
Seatoun is Wellington's top area at $1.93million.
"There are now 54 $1million-plus suburbs in Greater Wellington, that figure is up from 42 recorded during last quarter," he says.
Dunedin's first $1m-plus suburbs are Māori Hill and East Taieri at a median $1.02m.
OneRoof editor Owen Vaughan said anyone with a house is a winner. Oneroof-Valocity figures show the average gain nationwide is just over $200,000.
"Some areas have done better than others, with central Auckland suburbs enjoying the country's biggest windfalls and homeowners in Waitomo having to make do with the country's smallest value increases.
"It should come as no surprise that the biggest gains have been in the country's wealthiest suburbs, with OneRoof figures showing Herne Bay's average property value jumped $653,000 to $3.677m in the year to September 15," Vaughan said.