The independent economist's latest monthly survey on the adviser market reveals first home buyers in Auckland are struggling to compete with investors as the market soars.
Alexander said anecdotal evidence indicated first home buyers' hopes "have been dashed, with listing numbers falling, prices rising, and hefty competition from investors".
One adviser said FHBs were getting "increasingly desperate", fearing "they can't find anything, the houses they like sell at auction for silly prices, and that they will be priced out of the market if they wait any longer".
"FHB's can't buy, [they're] always out-bid by investors or existing homeowners," said another broker.
Would-be first time buyers are also finding it hard to pass banks' servicing tests, according to one Auckland adviser.
"First home buyers are still in the market but are being pushed aside due to the bank finance conditions on high LVR lending, less than a 20% deposit."
There remains a frenzy of investor activity, despite the recent move by two banks to hike deposit requirements back to 30% for landlords.
One adviser said there was "a bun rush to get investment approvals in at 20% LVR", before the Reserve Bank reimposes LVR speed limits on the banks next March.
Alexander's survey also reveals a surge in people looking for mortgage advice.
A net 30% of advisers told Alexander they had seen more first home buyers seek advice over the past month.