If the Melbourne buyer found a partner paid the same amount, they could borrow $1,054,000 together and would be able to buy the maximum property using the scheme.

But even if the Sydney buyer coupled up, they could together borrow a maximum of $1.12 million. Combined with a 5 per cent deposit, they would be left $305,000 short of the maximum purchase price.

“Just because the government says you can buy a property as much as $1.5 million doesn’t automatically mean that’s the property price you should be aiming for,” Canstar’s data insights director Sally Tindall said.

“Based on these figures, a couple both earning the average full-time wage probably aren’t going to be able to borrow enough to buy a $1.5 million house with a 5 per cent deposit. However, a couple on a slightly higher wage will,” she said.

She said the purpose of removing income caps, uncapping the number of places and increasing property price limits was to make the scheme more inclusive for first home buyers in different circumstances. Some might have a 15 per cent deposit, others might be on an above-average wage.

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“It’s incredibly tough out there for people on a huge range of different incomes,” she said, noting the high level of property prices now.

But she said banks would still assess whether borrowers could afford their repayments.

She encouraged borrowers to understand the consequences of taking on a loan for 95 per cent of the property, such as whether it pushed their interest rate higher, how much their monthly repayments would be, could they maintain an emergency buffer, would it affect their chance of refinancing and the risk of negative equity.

Mortgage broker Rebecca Jarrett-Dalton backed the First Home Guarantee scheme, but said many first home hopefuls had even more modest financial situations.

A recently graduated nurse earning closer to $80,000 with a HECS debt may have a borrowing capacity closer to $412,000, she said, making it hard to afford even a unit.

“It doesn’t mean they can borrow as much as they need to borrow,” she said. “If you’ve got those higher incomes that can get you to the higher purchase price, you’ve probably got capacity to save, unless you’ve been paying higher rent.”

Moderate income earners may need to make some compromises on the type of property or suburb they hope for, but overall she described it as a “fabulous scheme” that had helped most of her first home clients, albeit at a more modest price point so far.

“The $1.5 million is pie in the sky for a lot of people and I think the problem we have is properties will jump just as much in value.”

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AMP deputy chief economist Diana Mousina thought the price caps had been increased to be more in line with today’s median home prices.

She thought the scheme would push property prices modestly higher, albeit more than Treasury has modelled, amid a rising market and falling interest rates.

“The scheme, it doesn’t solve any of the longer-term affordability problems,” she said.

“In Australia 50 years ago, the home price to income ratio was at a much more sustainable level of four to five times … Now it’s more like 10, 11 years.”