A $5,000 increase to WA's first home owners grant for buyers purchasing new properties has been met with ambivalence by potential buyers and concern from the property sector and sustainability experts.

Key points: The WA Government announced a $5,000 increase to the first home owners grant

The WA Government announced a $5,000 increase to the first home owners grant Experts are concerned about the impact the grant will have on established vs new properties

Experts are concerned about the impact the grant will have on established vs new properties Professor Peter Newman suggests the Government focus more on redeveloping suburbs in "the middle ring" of the city

The Government, Opposition, and building industry all welcomed the announcement that the first home owners grant would increase from $10,000 to $15,000 for the year of 2017.

It was one of two changes made — along with increased income eligibility for its Keystart loan scheme — and together has been predicted to provide more than 3,000 extra jobs within the construction industry, with income then flowing into WA's "soft" economy.

But president of the Real Estate Institute of Western Australia Hayden Groves said while he understood the Government's need to protect the construction industry, he was worried it could be at a detriment to the property market.

"As an institute we're a little concerned that the gap between established property and new property for first home buyers is getting larger," he said.

"$15,000 is a significant amount of money.

"Established property in areas that are traditionally first home buyers territory will no longer be as appealing, or even less appealing as they already are, and it will therefore add to additional supply onto the market, which you can argue we probably don't need in this current market cycle."

Mr Groves said the institute would like to see the same incentive given to first home buyers purchasing existing homes.

"The positive side of it is it does bring more buyers into the market and so you do end up with more activity," he said.

"Over time the first home buyer becomes the secondary buyer.

"But certainly the immediate impact could be a downward pressure on the median house price in Perth."

Mr Groves also said it could potentially affect the state's already slumped rental market.

"Rental listings are sitting at around 10,500 — at levels not seen in Perth before," he said.

"There's very sluggish activity in the rental sector."

He said while activity was picking up — with rental properties now more affordable — more first home buyers entering the market would mean less people renting.

"So it could also impact further on an already under pressure rental sector, and mean further reductions in rental prices," he said.

"Which could certainly increase the rental stock on the market and therefore the vacancy rate."

Potential buyers not swayed despite extra incentive

Twenty-five-year-old engineer Emily Kendall from Balcatta said she was looking at buying her first home in the near future.

25-year old engineer Emily Kendall, with her father Gordon, said she was not interested in the grant. ( ABC News: Tom Wildie )

But regardless of the increased sweetener from the Government, she said she would prefer to buy an existing home.

"For the most part where you can build new places these days is really far away from the city," she said.

"I work in the city and I don't want to make that really long commute every day."

It would mean she would only be able to access a potential discount on her stamp duty, but for her the incentive on buying land and building was not worth it.

"I'm not so interested in the effort and the time," she said.

"The building is going to take another few years and I'm interested in the next year actually purchasing a place."

And it is not just the prospect of building on the fringes which is putting young buyers off.

Katelyn Mewburn, 28, from Claremont, said she hoped to buy and renovate an old house in an inner city suburb rather than buying off a plan.

Katelyn Mewburn, 28, said she wants to buy an inner city apartment and renovate it instead. ( ABC News: Laura Gartry )

"A lot of my close friends have had really poor experiences with buying off the plan with apartment living," she said.

"We have had a lot of apartments going up in the last year and I don't see the quality of build being that great."

Sustainability expert says increase a 'political stunt'

Professor of Sustainability at Curtin University Peter Newman said he saw the increase as a political stunt in the lead up to the state election in March next year.

"It's quite a lot of money being put out there but it is just another subsidy for urban sprawl," he said.

Professor of Sustainability at Curtin University Peter Newman called the move "a political stunt". ( ABC News: Laura Gartry )

"The reality is you cannot continue to say it's affordable to live 80 kilometres north of Perth.

"It costs so much to live there because you're travelling all the time."

He said instead there should be more focus on redevelopment closer to the city.

"That doesn't mean high rise apartments right in the city, it means in the middle ring, within 15 to 20 minutes of the city," he said.

"There's plenty of opportunities there but we're not getting any Government assistance to make that happen."

Professor Newman said the Government could no longer afford to keep subsidising urban sprawl.

"The new housing that's being developed on the fringes are the ghettos of the future," he said.

"Because they are getting poorer and poorer."