A social wellbeing report released by the Ministry of Social Development on Thursday shows the gap between the highest and lowest earners has closed for the first time since 1988.
It also reveals that people are living longer.
The ministry's deputy chief executive Don Gray says the Social Report shows New Zealand's quality of life is getting better, particularly in health, paid work and living standards.
But not all areas of society reported improvements, with housing affordability, participation in tertiary education, voter turnout and Maori language speaking rates all showing declines.
There has also been an increase in deaths from assaults and road crashes.
There are some regional disparities with Gisborne, Northland and the West Coast having comparatively poor outcomes across most indicators, whereas Auckland, Wellington, Christchurch and Nelson did relatively well.
Mr Gray says two-thirds of the areas measured were on par or better than the OECD average.
Health being sacrificed
Meanwhile, the head of a community housing organisation says people are going without medical care to pay for the increasing cost of housing.
Community Housing Aotearoa director, Therese Quinlivan, says some people are paying more than 50% of their incomes for housing.
She says people are not going to the doctor so they can afford to pay for mortgages and rents, which is impacting on their health and social wellbeing.