Under changes to the scheme announced in last year's state budget, a payment of up to $7000 will no longer be available to people buying established houses after July 1.

Real Estate Institute of Tasmania president Adrian Kelly said the number of first home buyers was dwindling across the state, and removing the grant would make the situation worse.

"I don't understand why you'd want to drive that first home buyers' market into the ground rather than help stimulate it," Mr Kelly said.

"The overall property market is finally starting to show some signs of improvement after a prolonged downturn, so we'll be very disappointed if the government does nothing but remove the grant."

Mr Kelly said he would take the issue up with Treasurer Peter Gutwein when the two meet in coming weeks.

Mr Gutwein would not speculate on the future of the scheme yesterday.

"We are currently putting in place a strong plan for the economy, however, I am not going to speculate on specific programs ahead of the budget," Mr Gutwein said.

Leading economist Saul Eslake said the scheme was wasteful and deserved to be abolished.

Mr Eslake said first home buyers actually stood to gain from scrapping the grant, with vendors selling houses to buy a second property the likely losers.

"This grant is almost always a waste of money," Mr Eslake said.

"All it does is inflate property prices and drive home prices up by the price of the grant - it does nothing to improve home ownership."

A grant of up to $23,000 will still be available to first home builders and buyers of newly built first homes under the First Home Builder Boost (FHBB) scheme after June 30.

But Mr Kelly said the FHBB scheme had minimal impact, with only about 5 per cent of Tasmanian first home owners building their own houses.

"The government needs to consider the other 95 per cent who now stand to get nothing," Mr Kelly said.

"If they're blocked from purchasing properties, the government stands to lose in stamp duty," he said.

Master Builders Tasmanian executive director Michael Kerschbaum said he hoped scrapping the First Home Owner's Grant would encourage more people to build their own homes.

"If you build a house from scratch there is a lot of flow-on effect before, during and after a house is built which drives economic growth across a range of industries," Mr Kerschbaum said.