Social Housing Minister Amy Adams said every Kiwi should be able to buy their own house if they want to.
"...so we are building on our existing suite of measures to support first home-buyers," she said.
The changes mean a couple will be eligible for an extra $10,000 of Government HomeStart Grants, taking the grants to $20,000 for an existing home or $30,000 for a new build.
Building and Construction Minister Dr Nick Smith said the grant complemented other Government measures to support first home buyers.
These included: Welcome Home Loans, which allow first home buyers to access Government-backed mortgages with a 10 per cent deposit; and
KiwiSaver FirstHome Withdrawals, which allow New Zealanders to access all of their KiwiSaver funds to put towards a deposit.
"Take a couple on the average wage in Auckland who have been in KiwiSaver for five years and are looking to buy their first home," Dr Smith said.
He said between these schemes and a KiwiSaver withdrawal couples should have around $60,000 to put a deposit on an existing home - without the need to dip into their other savings.
The latest QV average for the Auckland area, in August this year, was $1.014m.
When English was asked at the announcement if a couple on the average wage could afford the mortgage for a $600,000 house he said the risk was if interest rates increased.
Although National could not guarantee interest rates would not go up under its watch, he claimed there was more of a risk under Labour, saying its proposals to spend more and borrow more risked pushing interest rates up.
English said a combination of measures including support for first home buyers, opening up more land for housing and increasing the loan to value ratio on investors had helped flatten house price increases. The ratio of first home buyers was increasing compared to investors.
Labour's policies for first home buyers include its KiwiBuild policy to build 100,000 homes over 10 years - half of them in Auckland.
English made the announcement from a terraced one bedroom house at Hobsonville Pt which cost $450,000.
"As you're seeing here in Hobsonville, large numbers of houses are being built."
English said developments such as Hobsonville Pt were evidence of the ability to provide affordable housing in Auckland.
National has come under fire for a tardy response to house price increases in Auckland with groups such as nurses, teachers and police saying they are finding it hard to afford living in Auckland.
English believed the increases to the grants would help those groups, many of whom earned above the average wage.
The cost would be included in the 2018 Budget.
"It is important people have the sense that they're able to achieve the dream of home ownership.
"We believe with the combination of rapid and continued growth in the supply of houses, not just in Auckland but across New Zealand, with the enhancement of a scheme that has been tried and tested and works, people who are on the average wage will be able to put down a deposit on a $600,000 house."
He said last year 18 per cent of house sales in Auckland were below $600,000 - the cap for existing homes in the Home Start scheme.
