Rising house prices and flat interest rates have pushed housing affordability to its worst level in almost three years.
The latest Roost Home Loan Affordability Report says buying a house remains toughest in the big markets like Auckland, Christchurch and Wellington.
It says banks are starting to tighten rules on lending, possibly pre-empting a move by the Reserve Bank to place restrictions on low-deposit home loans.
David Chaston from interest.co.nz says lack of affordability is spreading to other centres and in some areas is at levels last seen in 2008.
He says interest rates are very low and incomes are rising steadily, but house prices in many cities are rising much more quickly than they have for a long time.
Mr Chaston says there are still some centres where houses remain affordable and in the last three years Hamilton, Whangarei, Palmerston North and Dunedin have not see the problem grow to the same extent as elsewhere.
He says first home buyers are going to find negotiations with banks become a lot more difficult with the threat of rising interest rates internationally and banks already applying restrictions on riskier lending.