First time home buyers are better off in the Manawatu/Whanganui region than anywhere else in New Zealand, according to new figures.

Palmerston North and Whanganui are among the most affordable cities in New Zealand for first timers, with Whanganui at the top of the list.

The latest AMP360 First Home Buyer Affordability Report shows that in Palmerston North, mortgage payments are 16 per cent of take-home pay and 8 per cent in Whanganui.

For the Manawatu/Whanganui region the figure is 13 per cent.

By comparison, first time buyers in Auckland can expect to spend a whopping 50 per cent of take-home pay financing their mortgage, meaning housing in the city is probably beyond the reach of first home buyers on a median income.

Interest.co.uk says the report shows housing is now 'severely unaffordable' for many first home buyers in Auckland, but not in the regions."As an Aucklander, you don't know how lucky you are," said

"In Palmerston North and Wanganui you are likely to spend way less on housing than you would in stressed areas," David Chaston of interest.co.nz. said.

"It enables individuals and people with families to have a much higher disposable income."

"For people who make the transition back, there are some fabulous stories," he said of people who had moved to a region from Auckland.

The figures are based on a typical couple earning a median wage for that age-group, buying a modest two or three bedroom house in an average neighbourhood, Chaston said.

Andy Stewart, REINZ spokesperson for the Manawatu region, is not surprised.

"I think it's common knowledge that our first home price is affordable," he said.

"The Manawatu offers very good value for housing across the board.

"I believe more people should be selling in Auckland and moving to the Manawatu," he said.

"For $400,000 in Palmerston North you get a really good home," Stewart said.

"First time home buyers can still get a good home for between $200,000 and $250,000.

"It's a hidden secret," he said.

There has been an increase in interest in property in the region.

"We are experiencing interest from buyers in the Auckland and Wellington regions looking for investment properties in the Manawatu," Stewart said.

"People are also coming from other regions," he said.

In Wellington, mortgage payments are more than 25 per cent of take home pay and in Canterbury more than 29 per cent.

The report says housing is affordable when mortgage payments are less than 40 per cent of take home pay.

More than 40 per cent is considered unaffordable.

The report only considers mortgage costs.

Other home ownership costs like rates, insurance and maintenance are additional.

Interest.co.nz said the report shows Auckland house prices have vastly outpaced the growth in household incomes of first home buyers.

The AMP360 First Home Buyer Affordability Report tracks changes in mortgage interest rates and the REINZ's lower quartile selling prices in each region of the country with the median after-tax income of first home buyers.