Why economic uncertainty will put an end to first home buyer grants

There's bad news for Aussies looking to take their first step onto the property ladder: first-home grant schemes may be on the way out.

According to a recent finder.com.au survey, economists are generally against the grants - in fact, 38% said the schemes should be abolished entirely, while 31% said they should be reviewed.

But why?

Also read: The unlikely suburb clocking up million-dollar sales

While the grants can make it easier for first-home buyers to get enough funds together for a property, these economists argue that the availability of these funds can push up property prices, effectively eliminating any benefit.

First home owner grant rules vary between states, but typically require that the home is the first property you have purchased, that it is purchased to live in, and that it falls below a certain value.

Most states have a $10,000 grant, but the figure is higher in some less populated states; in the Northern Territory, for instance, it's $26,000.

Many states also offer concessions on stamp duty for first home owner grant recipients.

Also read: This is the worst Aussie state to buy property

But, dumping the schemes would be tricky for governments, finder.com.au points out.

Arguments about markets favouring established buyers are already raging, and with no changes anticipated to negative gearing rules, proposing a scheme that makes it harder for young house buyers to get a foot in the market might be electorally risky.