Adele De'Arth says the dream of owning her own home is one step closer to becoming reality after the Government loosened criteria for its first home grants.
House price eligibility caps in Tauranga have been lifted by $275,000.
De'Arth, 26, and her partner put their property hunt on hold after rising house prices kept pushing the dream out of reach.
But she says now the price cap has been lifted they may start looking again at what they can afford.
"It feels like that dream is a bit closer."
De'Arth, co-owner of But First Dessert in Tauranga, says there was also a "little bit of hope" that house prices were dropping in the city.
She had been putting business first because owning her own home had seemed so out of reach for so long, De'Arth said.
"Everyone in my age group has been reconsidering that normal order of things - buying a home, getting married, having babies - we might have to start doing things backwards.
"It is good the Government has finally recognised the need to interfere. It gives us a little bit more hope."
Finance Minister Grant Robertson announced a two-pronged housing strategy as part of Budget 2022 that will loosen criteria for the grants and remove all price criteria to apply for first home loans.
Price caps in the Tauranga urban area - including Western Bay - lifted from $525,000 to $800,000 for existing properties and from $600,000 to $875,000 for new properties.
The caps in Rotorua have been raised to $525,000 for existing and new properties, up from $400,000 and $500,000 respectively.
The grant allows KiwiSaver contributors up to $10,000 towards a deposit on their first home.
Chief executive of the Realty Group, which operates Eves and Bayleys, Heath Young, said it was good news for the first-home buyer and wider property market.
"They were always a good initiative but the previous caps quickly became redundant due to increasing house levels over the past two years.
"The new caps are more realistic and in line with where properties are priced around the regions."
The latest Real Estate Institute of New Zealand data showed Tauranga's median house prices had the biggest fall since records began 30 years ago, dropping $59,000 in April to $991,000.
Rotorua's median house price fell the most it had in eight years, dropping $70,000 to hit $700,000.
First National principal and Rotorua Real Estate Institute of New Zealand spokeswoman Ann Crossley said anything that helped people get on the property ladder was good news.
"The cap was well overdue."
Crossley said first-home buyers had been struggling to find a home worth $400,000 the banks would lend on as they generally needed a lot of maintenance.
The lift in price cap will give first-home buyers more choice.
"They might not get what they want but at least it is getting a lot closer."
Housing Minister Megan Woods said the Government was increasing house price caps for the grant to align with lower-quartile market values for new and existing properties.
"This recognises the changes in house prices over the past year."
The Government was also removing house price caps entirely for the first home loan.
"The house price and income caps will now be reviewed every six months to make sure they continue to stay up to date."
The first stage of a $350 million Affordable Housing Fund will also offer $50m worth of grant funding to not-for-profits to deliver affordable rental housing in Auckland, Tauranga, Rotorua, Napier/Hastings, Wellington, and Nelson/Tasman.
"This fund will initially help address the needs of New Zealanders who struggle to meet the cost of a market rental but can't access public housing.
"We have seen that rising construction costs are making it harder for many of our providers to deliver affordable housing. This fund will bridge the gap for organisations to get new affordable rental accommodation built."
The Kāinga Whenua Loan cap will also be increased from $200,000 to $500,000 to provide more choice and opportunities for people building, relocating or purchasing a home on whenua Māori.
The changes to the First Home Grant take effect from May 19 and the First Home Loan and Kāinga Whenua Loan from June 1.