First home buyers have officially started to pare back, with mortgage brokers noticing a dramatic drop in the level of enquiries.
Mortgage Broker Loan Market Group has seen a 26 per cent drop in the number of enquiries from first home buyers since the grant was reduced.
Mr Rushton believes tougher lending criteria by the major banks has made it more difficult for some first time buyers to get into the market.
He also said the expanded grant scheme had been crucial in cushioning the Australian economy from the worst of the world’s economic woes.
“Overall, the expanded grant scheme provided a core foundation for the property market,” he said.
“It helped cushion it from the dramatic downturn some overseas property markets experienced.
“One of its greatest legacies was that it generated a lot of confidence in the market which should remain stable despite the inevitable upward movement in interest rates from near record lows.”