Analysis: The impact of Scott Morrison's generous plans for property buyers

Firstly, Mr Kusher said the reach of the scheme would only affect under 10 per cent of first home buyers, as the last 10 years recorded an average of 103,485 loan commitments for first home buyers.

Secondly, 20 per cent is not a requirement for a mortgage, with borrowers having to pay lenders mortgage insurance, which is either incorporated into the loan or is an upfront fee.

Thirdly, despite providing first home buyers a reduced cost of entry, they still need to pass the regular credit checks like every other borrower.

“Over the past four years or so, it has become increasingly more difficult to access a mortgage, and borrowers participating in this scheme will still need to pass the normal credit checks,” Mr Kusher said.

“Given this, the scheme, as proposed, is not going to result in anyone that currently can’t access a mortgage to take out a mortgage. What it will mean is that people that already qualify for a mortgage can potentially avoid LMI and they can also purchase with a smaller deposit.”

Mr Kusher does see some positivity in the scheme – allowing first home buyers to purchase a property with a smaller deposit allows them to potentially own a home earlier.

However, he said that this is not likely to help out the broader problem of housing affordability.

“Given that borrowers still need to pass usual credit checks, the only people that will have access to the scheme are those that could already purchase any way,” Mr Kusher said.

“While the scheme will help borrowers enter the market earlier, it seems unlikely that it will do anything to improve housing affordability.

“If anything, it might increase demand from first home buyers and lead to higher prices within the price points that fit with maximum loan sizes, which have not yet been determined.”

Ideas that could address housing affordability, Mr Kusher suggested, should focus more on supply.

This includes reforming town planning to allow for higher-density dwellings where demand is strong, improving the physical access to affordable housing through upgrading infrastructure and addressing “inefficient taxation transactional taxes”, with stamp duty given as an example.

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