Housing economics experts have warned the government against a proposal to make owner-occupiers’ home mortgages tax deductible after the new assistant minister to the treasurer left the policy option on the table.

The Grattan Institute’s chief executive, John Daley, told Guardian Australia the deduction would cost the budget $19bn a year and do little to improve housing affordability, compared with tackling negative gearing and capital gains tax concessions.

On Thursday Michael Sukkar, whose responsibilities include housing affordability, told Sky News the government wanted to give people a “realistic opportunity to save and purchase a home”.

Asked whether the government would consider adopting the US system where owner-occupiers deduct the cost of their mortgages from their tax bill, Sukkar said there was no “silver bullet” for housing affordability, including that option.

Sukkar suggested housing supply, not decreased demand, was the most important factor and reiterated government policy not to follow Labor’s lead by restricting negative gearing or reducing capital gains tax concessions.

But asked to rule out allowing owner-occupiers a new tax deduction to compete with investors, Sukkar said only: “I will examine, and I know that the treasurer will look at, all good ideas.

“But I am not going to announce them the day after I’ve been announced as assistant minister to the treasurer, so we’ll have more to say in coming months.”

Asked if the owner-occupier deduction was under active consideration, a spokeswoman for Scott Morrison told Guardian Australia: “Housing affordability will be an important policy focus of the Turnbull government in this parliamentary term.”

Morrison recognised housing affordability as a problem in a major speech in October but has so far only canvassed supply-side policies including encouraging states to release more land.

In November the New South Wales housing minister, Rob Stokes, criticised negative gearing, arguing that it did nothing to improve supply but advantaged investors who reduced their taxable income at the expense of other Australians.

Daley said the possible deduction for owner-occupiers was “one of the sillier policy ideas I’ve heard in a long time” and should be ruled out in favour of tackling negative gearing.

Grattan Institute modelling in 2013 suggested a new tax deduction would cost the budget at least $19bn a year, he said.

He said allowing home owners to deduct their mortgage costs would “only make sense” if coupled with applying capital gains tax to homes.

Even then, capital gains tax would only just recoup the cost of the new deduction and transition costs, such as grandfathering the tax increase, would blow out the budget during the transition.

Daley said tax deductions for home owners had contributed to the US housing market collapse and global financial crisis because owners had an incentive to keep their borrowings high rather than repay their mortgage.

“I don’t think it’s going to help first home buyers that much because it also increases how much existing home owners are prepared to pay for their next house,” he said. “Getting rid of negative gearing would be a much cleaner way of improving housing affordability.”

A University of New South Wales economist, Nigel Stapledon, told Guardian Australia the cost to the budget would be “pretty substantial”.

Stapledon also questioned the rationale of further advantaging owner-occupiers whom he said benefited from not paying capital gains tax and not paying rent or tax on imputed rental income.

“One of the issues is that any tax deduction would have more value to those that already pay tax,” he said. “For people on low incomes, who are not paying much tax, it would have no particular benefit.”

Stapledon said the impact on housing affordability was “difficult to gauge” as making the cost of capital cheaper for owner-occupiers could push prices up in supply-constrained markets.