The federal government announced an increase in price caps under the Home Guarantee Scheme, bringing the cap in Hobart from $500,000 to $600,000 and from $400,000 to $450,000 for the rest of the state.

Under the scheme, buyers with deposits as low as five per cent can apply.

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Prime Minister Scott Morrison said the scheme had already helped 60,000 Australians purchase homes.

"We're building a stronger future for Australians by making homeownership easier by making more properties eligible for the Scheme and expanding it to 50,000 places each year," he said.

But Tasmanian economist Saul Eslake was not convinced the scheme would help more Tasmanians into homeownership.

"What history tells us is that anything that allows people to pay more for housing than they otherwise would, results in more expensive housing, not in more people owning housing," he said.

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Mr Eslake said those who had their finances in order would be able to qualify before the 50,000 limit kicked in, moving to "the front of the queue".

"But someone else will have been moved back ... they reshuffle the queue of would-be first home buyers in favour of those who just happen to be able to arrange their affairs to qualify for the scheme in time," he said.

Mr Eslake said the scheme would enable people to borrow more money than they otherwise would, and as a result they would have a higher mortgage.

He also pointed to the risk of low deposits, with larger deposits serving as a buffer should house prices fall.

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Tasmanian Housing Minister Guy Barnett welcomed the increased price caps, saying it would help hundreds of Tasmanians into the property market.

Conversely, Labor Lyons MHR Brian Mitchell said the existing caps were too low.

"That's why we have called for the government to increase them and why we have already promised to review and increase them if Labor wins the election."

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Mr Mitchell said the Labor government would create a Regional First Home Buyer Scheme to help 10,000 Australian families each year.

"With skyrocketing house prices and a sharp drop in affordability, regional first home buyers need and deserve their own dedicated scheme to support them to buy a home. I know this will be particularly helpful in Tasmania."

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