Young couples say a Government grant designed to help first-home buyers save enough money for a mortgage deposit is out of touch with sky-high house prices.
Under the First Home Grant, couples can get a between $10,000 and $20,000 Government-paid lump sum to add to their deposit for a first home provided they meet eligibility criteria.
In Auckland that criteria includes paying no more than $600,000 for an existing home or no more than $650,000 for a new-build house.
Yet just 16 per cent of homes sold in Auckland in the past year went at prices below those caps, according to Real Estate Institute of NZ figures.
Many of those were in suburbs between 30km and 50km from the city centre.
Housing Minister Megan Woods is now considering whether the caps needed to be raised, a spokeswoman has confirmed.
Kevin Russo - a mortgage adviser in Tauranga where the First Home Grant price caps were $500,000 for an existing home and $550,000 for a new build - said Bay of Plenty buyers faced the same problem.
"We've got a massive amount of first-home buyers wanting to get into the market at that affordable level where they qualify for the first-home grant," he said.
"But it's gotten extremely hard now."
House prices have remained stubbornly high despite most pundits tipping them to fall as a result of the Covid-19 economic downturn.
Economists had predicted house prices to fall anywhere between 7 and 15 per cent this year.
However, Russo said the market had bounced back almost immediately post-lockdown.
Mortgage brokers were now "flat tack" trying to help buyers secure home loans from banks.
"Banks are overwhelmed with applications; the market is booming," he said.
Yet while buyers were keen, banks in the current economic climate were "very reluctant" to lend to first-home buyers who had small deposits saved.
This struggle to secure home loans was being compounded by the Government's unrealistic First Home Grant price caps, he said.
Decent homes advertised for less than $500,000 in Tauranga were "selling extremely quickly" and attracting fierce bidding wars, he said.
Finding new-build home and land packages less than $550,000 was possibly harder.
That was partly because the Government did not offer new infrastructure funding, meaning there was no new land coming to market and consequently no new residential developments, Russo said.
"Building companies selling homes at $550,000 could sell them five times over," he said.
Russo hoped to see the First Home Grant price caps scrapped altogether.
They were last raised by the previous National Government in mid-2016, rising from $500,000 to $600,000 in Auckland for existing homes and from $400,000 to $500,000 in Tauranga.
Auckland's median sale price, meanwhile, hit $910,000 in May, up $86,000 on May 2016, according to Reinz figures.
Bay of Plenty median sales prices had jumped $125,000 over the same period.
Woods' spokeswoman said advice had been sought around "what, if any changes" were needed to the First Home Grant price caps.
Woods also previously said the Government wouldn't repeat mistakes that led to first-home buyers being shut out of the market in the years after the Global Financial Crisis in 2008.
Loan Market mortgage adviser Bruce Patten said competition for Auckland homes under the price cap was equally fierce.
He pointed to the new Paerata Rise development 40km south of Auckland's city centre.
It had four three-bedroom, new build homes on sale for $650,000 last weekend and each was snapped up immediately.
Patten had three clients trying to buy the homes and only one was successful.
He estimated there were "probably a few thousand people" interested in the properties.
Reinz chief executive Bindi Norwell would also like to see the First Home Grant price cap raised.
Under the current cap, just 4 per cent of properties sold in the North Shore would have qualified for the grant, she said.
"The area where you're most likely to be able to use a First Home Grant to purchase a property is in the Franklin and Papakura Districts – with 27 per cent of properties sold below the threshold," she said.
"However, as Papakura is more than 30 kilometres from the CBD and Franklin is nearly 50 kilometres from the CBD, it's understandable why these areas might not be the most popular ... suburbs for first home buyers."
Shontelle and Henae Hira can barely believe their eyes as they watch the wooden frames of their new home rise in suburban Tauranga.
Months earlier they had given up on their dream of home ownership after failing to find anywhere in their price range.
"We'd been wanting to buy our first home and saving as hard as we can, but never felt it was going to happen or was possible," Shontelle said.
The couple had cobbled together their KiwiSaver investments and moved in with Shontelle's parents to save as much for their deposit as possible.
But it still wasn't enough. They needed the Government's First Home Grant as well.
Yet none of the homes on sale below Tauranga's First Home Grant $500,000 price cap were "in a state to put my 4-year-old son in ", Shontelle said.
Then they looked at new-build homes. Couples building a new home could secure up to $20,000 towards their deposit - double the $10,000 offered to those buying existing homes.
Yet despite months of looking, all the new-build packages under $550,000 had sold out.
Luckily, Shontelle worked for a developer. And when a buyer pulled out of a deal for a $550,000 new build with her company, Shontelle and her husband jumped in to take over the purchase.
Signing the contract just before New Zealand went into lockdown in March, they now feel "incredibly lucky".
Shontelle said every day several young couples contacted her company hoping to buy new builds that would qualify for the grant.
Yet her company had none left because they couldn't get their hands on new land to build more.
House sizes were also shrinking. Eighteen months ago, 145sq m homes on 350sq m sections had sold for $550,000.
By contrast, Shontelle and Henae paid the same price for a 126sq m home on a 145sq m section.
Yet the purchase was a huge milestone for the excited couple; Henae grew up in a family where neither parent owned property.
And - in a unique twist - they know their home will be built with extra loving care.
That's because Henae will be building it as he works for the company contracted to build the development.
"Not only ours, he will be building the whole street," Shontelle said.
First-home buyer grant eligibility
To be eligible for a First Home Grant, you must:
• Have earned less than $85,000 before tax for a single buyer or less than $130,000 as a couple in the past 12 months.
• Not currently own any property.
• Have contributed the minimum amount or more to KiwiSaver for at least three years
• Agree to live in your new house for at least six months.
• Purchase a property that is within the regional house price caps.
First-home buyer grant price caps
To be eligible for a First Home Grant, you must:
• Purchase an existing home less than $600,000 or new build below $650,000 in Auckland or Queenstown Lakes District.
• Purchase an existing home less than $500,000 or new build below $550,000 in Hamilton City, Tauranga City, Western Bay of Plenty District, Kāpiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Tasman District, Nelson City, Waimakariri District, Christchurch City, Selwyn District.
• Purchase an existing home less than $400,000 or new build below $450,000 in the rest of New Zealand.