In one of several measures in Tuesday's federal budget targeted at the property sector, an extra 50,000 places will be made available under the government's Home Guarantee Scheme.



The extra capacity includes 35,000 places a year under the First Home Guarantee scheme allowing first-home buyers to purchase a new or existing property with a deposit of only 5 per cent.



Under the scheme, the federal government guarantees up to 15 per cent of a loan, allowing buyers to avoid lenders mortgage insurance. The scheme is capped at $700,000 for buyers in Melbourne and Geelong and $500,000 for regional Victoria.



Five thousand places a year will be reserved for single parents who only need to save a 2 per cent deposit.



The budget also included a new Regional Home Guarantee scheme offering 10,000 places from October. The scheme helps those wanting to build new homes in the bush.



In addition, Treasurer Josh Frydenberg announced $2 billion for affordable housing through the National Housing Finance and Investment Corporation.



KR Peters Director Peter Nicolls said the budget was very much aimed at the hip pocket as the government tries to alleviate the cost of living pressures.



He said support for first home buyer schemes and cuts to the fuel excise would help support house prices and stave off any falls in values for "a bit longer".



However, Mr Nicolls said he was concerned that extensions to the various home buyer schemes would put further pressure on the price of land and ratchet up demand on already stretched builders facing labour and material shortages.



"There is not much in the way of stock at the moment. The big problem is developers drip feeding the market at exorbitant prices," he explained.



Mr Nicolls said he was also concerned that government schemes allowing people to buy with as little as a 2 per cent deposit does not encourage good saving habits.



"It doesn't actually teach people to save. People wouldn't need a handout from government to save them mortgage insurance if they have made a commitment to save.



"I think personally that if they abolish these schemes people will save and developers knowing they won't get the same prices will then adjust prices downwards."



Mr Nicolls said the Coalition had done a reasonable job managing the economy "under the circumstances" taking into account the COVID-19 pandemic and now the war in Ukraine.



However, he said the government had been forced to acknowledge that "people were feeling the pinch".



"The next six months are going to be very interesting. There are more rumours about more builders going out of business and, of course, everyone is waiting for the announcement on when interest rates will start rising.



"The budget was a good budget for where we are now. It will help people get to the finish line, to end of year."