New Massey University research shows housing affordability dropped an average 14 percent last year.
Data from Statistics New Zealand, the Reserve Bank and the Real Estate Institute was analysed to calculate housing affordability throughout the country between September and November last year.
The report says that by November last year, houses across New Zealand had decreased in affordability by 14.1 percent since November 2013.
Auckland is the worst-hit region; housing there is 40 percent less affordable than the national average, and it has the potential to reach levels not seen since before the global financial crisis of 2008.
Central Otago is a close second at 39 percent less affordable than the average. Neighbouring Southland, by contrast, is the most affordable region, at 54 percent more affordable than national average.
Read the full report here.
Report author Professor Paul Gallimore predicts house prices will continue to rise, particularly in Auckland.
"Affordability is likely to continue to deteriorate in 2015 and as far as Auckland is concerned, if the current trend in the latter part of 2014 continues, then it will begin to approach those levels which were last seen around 2007, 2008."
The Reserve Bank is thought to be looking at new measures to rein in mortgage lending but financial commentator Roger Kerr said there were no easy options.
The PwC partner told Morning Report new measures could include an income-to-debt servicing ratio, but that could hurt first-home buyers or people who are struggling rather than those who are driving prices up.
"Another measure could be the restriction on the number of houses an individual can own - and one could see enormous problems with trying to police that."