The house is one of only a handful of three bedroom homes on the market in Launceston for less than $300,000 - the cap for federal government's Family Home Guarantee in Tasmania, other than a capital city.

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The scheme, designed for a single parent with more than one child, has come under increased scrutiny in Launceston due to a shortage of affordable and suitable housing options.

Touring the home on Friday, Labor Housing and Homelessness spokesman Jason Clare renewed calls for the government to raise the cap, describing 89 Lawrence Vale Road as the perfect example of everything wrong with the scheme.

"It's the perfect place if you want to knock down, or re-build in Launceston," he said. "Yet this is the sort of place that Scott Morrison thinks that mums and kids in Launceston should buy."

"The cost of houses in Launceston has gone up dramatically in the 12 months. It's gone up by about 18 per cent in regional Tasmania. To put that in perspective, that's almost as much as property prices have jumped in Sydney."

However, Bass Liberal MHA Bridget Archer said Mr Clare's claims were nothing but cynical politicking, with comments made to the media a clear indication he was more interested in the marginality of the seat, rather than the issues facing the region.

"As a former sole parent, I won't be lectured to by Mr Clare about the challenges of single parent families," she said. "Notwithstanding this, as I have previously stated, I have and continue to make representations to the minister on the challenges presented by current cap.

"As also previously mentioned, in the legislation the minister reviews the prices caps every 12 months and they are currently under consideration for the July 1 tranche."

Mr Clare said he would like to see the cap in Launceston matched to at least the $400,000 threshold available in Hobart.

"Talking to real estate agents here in town, they tell me that if it was $400,000, there would be a lot of three-bedroom homes that single mums and kids could move into straight away," he said.

"The cap is different in different parts of the country. You only get the money from the bank to buy a place under the scheme, if the bank is satisfied that you're capable of paying."

The Family Home Guarantee was announced as part of the recent federal budget to support eligible single parents with dependents to purchase a home and isn't due to commence until July 1.

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