Central Otago is now the country's least affordable housing area, even displacing Auckland, according to Massey University's quarterly survey to June.
While home affordability across the country had been improving towards the end of last year and the first quarter of 2016, there has since been a "significant reversal'', down 9.2%.
"Central Otago Lakes is now 66% less affordable than the rest of New Zealand, so displaces Auckland in the notorious top position in that respect, at 52%,'' the survey said.
Housing affordability is calculated using households' average weekly earnings, median selling prices and the current mortgage interest rate.
In May last year the median national house price was $460,000 and in May this year it was $506,000, while the median value of the Central Otago Lakes area stood at $707,250, "significantly higher'' than a year ago.
Central Otago Lakes house prices grew by $202,000 annually and by $151,139 quarterly.
Central Otago Lakes was alone in having a monthly value increase during the quarter, while Auckland's median price in May of $805,000 was a $15,000 decline on March prices.
"A booming tourism industry and low median wages could underlie the regional picture in Central Otago Lakes,'' the survey said.
Manawatu-Wanganui, Southland and Otago are the three most affordable areas in the country.
The survey said the accelerating decline in Central Otago Lakes affordability was "unprecedented'' and likely to continue until supply was delivered.
"And to some extent, until it is clear if tourism will be affected by recent international events.''
The survey noted it "almost seemed an anathema'' to suggest Auckland was now more affordable, and it was perhaps better to suggest Auckland was "slightly less unaffordable'' than a year ago.
While overall wages had increased in New Zealand "slightly'' during the past year, they had "languished'' since February, the survey said.
