People's ability to buy a house worsened in most regions, says a survey from Massey University's real estate unit.
Only in Taranaki and Southland area did affordability increase because of a fall in median dwelling prices in those areas.
The quarterly survey, sponsored by AMP and released yesterday, was carried
out during the three months to December.
Rising house prices throughout most regions were blamed for the drop in affordability, a trend which has been constant for many years.
The survey highlighted declining affordability outside major centres, and said it was worst in the latest period in Manawatu-Wanganui.
But this region was "playing catchup" to the national market, the report found. House prices had been slower to increase there than in other regions.
The quarterly home afforda-bility survey gauges house prices, salaries and interest rates.
Angela Maynard, co-ordinator for the Tenants Protection Association Auckland, said many people faced the prospect of renting all their lives and were looked down on by homeowners who felt in a better class because they owned property.
"There's this idea that you're not a good New Zealander if you don't own your house, which comes from the pioneering days of the migrants and the land grab, handed down.
"People don't feel they fit into the community unless they own."
Graham Crews, senior real estate lecturer at Massey, said the housing market had been operating at the top of its cycle for the past four years, despite Reserve Bank predictions thatthe market would soften.
David Chote, general manager of distribution at AMP, said no one could have predicted the market would remain so strong for so long.
The strength of the housing market was a reflection of a strong domestic economy and low unemployment.
A 99-city affordability survey also out this week found Auckland more pricey than Dublin, Washington and Melbourne.
Auckland ranked as one of the world's most costly cities, according to the Demographia International Housing Affordability Survey.
Auckland was outstripped only by major cities in the United States, Britain and Australia.
