Rhonda Maxwell, spokeswoman for mortgage broking group Roost Home Loans which prepared the data, said first home buyers were seeing very low interest rates and a stable outlook into early next year which improved confidence.
"Banks are also competing hard to boost their lending to property investors and first home buyers, who are increasingly withdrawing their KiwiSaver funds to use for deposits," Ms Maxwell said.
KiwiSavers are able to withdraw their contributions to buy first homes after being in the scheme for three years.
She said while Invercargill took back the title of the most affordable from Wanganui, Queenstown remained the least affordable area to buy into.
The Home Loan Affordability report measures affordability nationally and regionally for individual income earners and households.
More than half of the home owners are now on floating mortgages and most new borrowers are choosing to float, given advertised floating rates at around 5.75 per cent are cheaper than average longer term fixed rates at around 6.2 per cent.
Roost said the median house price in Wanganui in August was $192,500, which was a significant increase from the $162,000 in July. Five years ago the median house price in Wanganui was $159,500.
Matching the shift upward in median house prices was the median take-home pay in the city. For a typical home buyer it was $681.45 in August, a lift of 7.9 per cent from $631.68 a year ago. Disposable income had increased in the 12 months to August - up from $412 in 2010 to $458 this year.
The mortgage watchdog's assessment assumes the buyer pays a 20 per cent deposit and there are two adults and one child under 5 in the home, with one adult working full-time and the other part-time, and receiving Working-for-Families benefits.
OUT IN FRONT
How much of a median income is needed to pay the mortgage on a median-priced home?
32.7 per cent Wanganui
46.1 per cent New Plymouth
37.9 per cent Palmerston North
49.8 per cent Napier
50.6 per cent Kapiti Coast
