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Australia will take a 217-run lead into the third day of the First Test against New Zealand, powered by Cam Green's superb 174 at the Basin Reserve.

Demoralised by Cam Green's mighty unbeaten 174, New Zealand have fallen into an all-too-familiar abyss against Australia in the first Test.

The Black Caps are again at the bottom of the well against their arch rivals, trailing by 217 runs with only a sliver of light to cling to.

That came in the form of two late wickets in the last half hour at Wellington's Basin Reserve on day two, leaving Australia 2-13 in their second innings.

But New Zealand are barely hanging on after a day dominated by the tourists, who put the Kiwis away either side of lunch - first with the bat, then with the ball.

Resuming at 9-279, Green and Josh Hazlewood sparkled with a century partnership that lifted Australia to 383 all out.

In reply, New Zealand were dismissed for 179 inside two sessions, a capitulation that at least gave them a look at the Australian top-order before stumps.

Tim Southee - perhaps fuelled by his first innings 0-92 - made the last half hour count, dismissing Steve Smith and Marnus Labuschagne after what the NZ Herald called "some of the Black Caps' grisliest cricket in a decade".

Friday started as a balanced contest before Green and Hazlewood started the rout, denying expectations of a swift end to their last-wicket stand.

New Zealand had to wait until after the lunch break to bat as Green - who started on 103 - plundered their attack for two more hours.

The pair added 116, the highest 10th wicket stand against New Zealand in their 469-Test history.

Green's mature innings, blending explosive boundaries and smart strike rotation, was his best Test score, trumping his 114 last year against India.

Hazlewood claimed a record of his own, with his 22 bettering Glenn McGrath's 14 as the best by an Australian No.11 in New Zealand.

"Something different from me," Hazlewood said, praising Green.

"For his career, this can be huge, his second 100 for Australia ... against an attack on that sort of wicket; outstanding."

When New Zealand began the chase, it was as if Green's knock had knocked the stuffing out of them.

Only Glenn Phillips' run-a-ball 71 and Matt Henry's even-quicker 42 gave joy to Wellington locals, who offered the biggest cheer of the day to an after-tea streaker.

New Zealand's top order capitulated, losing three wickets in six balls to be 3-12.

The worst was a shambolic run-out of Kane Williamson, who clattered into Will Young and was caught short by Labuschagne.

So often the Black Caps' talisman, Williamson fell for a second-ball duck between Tom Latham and Rachin Ravindra's cheap dismissals.

After sustaining 12 overs of pressure, Daryl Mitchell (11) and Young (9) lost concentration were caught behind off successive balls, with Mitchell edging Pat Cummins and Young feathering Mitch Marsh down the leg-side.

From 5-29, Tom Blundell and Phillips gave the Black Caps some much-needed stability with an 86-run stand.

Lyon (4-43) broke it by bamboozling Blundell, before taking three more wickets as the Kiwi tail swung aggressively.

With Australia facing eight overs before stumps, Southee made sure they counted.

Smith's third-ball duck and Labuschange's two - his sixth straight Test failure - gave the fans who stuck out the bitter day something to cheer.

But in an illustrative end to the Kiwis' day, Southee dropped nightwatchman Lyon at second slip off the last ball.

It's not a new situation for New Zealand, who've won just one of their past 30 Tests against Australia.

"They're an incredible team," Phillips said.

"I'm pretty sure most teams in the world struggle against them. It's not just us."

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