Those struggling to afford their first home say the government's housing package does not go far enough to help them get a foot in the door and address the imbalance favouring speculators.
Auckland resident Britany is still bidding on houses at auction a year into searching for her first home, and said the market needed to slow down.
"The struggles have been finding homes that we like and that fit what we're looking for. I guess there are just not enough homes on the market and when one does pop up that ticks all our boxes it seems like it ticks everybody else's as well so it's just a competitive market," she said.
"It's been trending upwards for the last 10 years but we'll see. We're trying to get in now before it goes up any higher."
Rachel More is a solo mum and teacher in Lower Hutt who sold the house she shared with her husband after they divorced.
She has saved up $250,000 for a deposit to buy her own house, but she said her bank would only provide her a $260,000 mortgage.
That gives her a total of $510,000, a sum More said would get her a cardboard box in the current market.
"If I was to take them up on that offer and manage to find my cardboard box my mortgage payment a week would only be about $240."
That's less than her current rent and More said she was "mortified" the bank would not loan her more given she could afford it.
She said aside from banks loosening up lending criteria, the government needed to look at stopping closed tender, lift the cap on people being able to use their Kiwisaver to add to their deposit, and introduce a capital gains tax.
First Home Coach chief executive Matt Taylor told Checkpoint the announcement is a missed opportunity.
"In a word, underwhelming," he said.
"It's a token gesture from a government where first home buyers have been waiting five long years for a review of these key assistance packages.
"They do make a difference, the packages themselves. But I just don't think the proposed changes go far enough to help first home buyers."
He said income caps were never really a problem, and the house price caps were still too low. For example, the new Auckland cap is $700,000 a new build and $625,000 for an existing house.
"It's well out of the range where we're seeing prices now in market. The government had a key opportunity here to really make an impact for first home buyers. I just think they've missed the mark on this one."
He said the big sticking point is getting the deposit together.
"We see first time buyers really relying on key policy from the government here, like the First Home grant to boost the deposit up.
"[The government] had a real opportunity today to make a statement. But I think they're really just paying lip service to first home buyers."
First Home Buyers Club director Lesley Harris said the government had not gone far enough to help first home buyers.
"It's still really really tough for people to get the lending, that's the biggest problem. Things like increasing the brightline test is that really going to help people get mortgages and help people save for their deposit?"
Harris said doubling the brightline test to 10 years could mean less heat in the market which could have downsides.
"It also could be said that it's going to force landlords out of the market or people won't be so keen to buy rental properties which will just push the rental prices up further which will then make it harder for people to get their deposit."
Landlords who sold houses between October and December last year pocketed a record $6.7billion - that's the profit made compared to what they bought the properties for.
The CoreLogic figures show these realised capital gains on house sales totalled just over $16 billion since the nationwide lockdown last March.
Its head of research Nick Goodall said many first home buyers would benefit from the housing package's extension to first home grants, but not all.
"The key question is going to be those would-be first home buyers at the very low end of this game who cannot afford to buy a home today, this may not be much help to them. The increase in the cap they are probably not even close to that cap anyway so there are probably parts of the market that are not going to be impacted very positively by this."
Goodall expected the combination of measures announced so far would dampen rampant house price growth.
"We think house prices will not grow at the same rate that they have previously. We're not necessarily expecting a drop in values, we're not expecting people to significantly exit the market."
Economists said the biggest impact on investors will come when a loophole is closed that allows them to claim mortgage interest costs as an expense.
Under this change the Property Investors Federation estimates the cost of providing a $600,000 rental property will increase by around $6000 a year.
Until now it has been free money, with 40 percent of residential investor loans sitting on interest only. The Reserve Bank is expected to soon limit such lending to investors.