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Bigger grants for new home purchases may fail to revive Queensland’s ailing construction sector, the Real Estate Institute of Queensland (REIQ) says.

The Newman government’s first budget will more than double the grant for first home buyers who purchase new properties, to $15,000.

But it will scrap a $7000 grant for first home buyers purchasing existing homes.

The government says the changes are part of its plan to stimulate activity in the ailing construction sector.

But REIQ chief executive Anton Kardash says the government should brace itself for disappointment.

He says history has shown first home buyers prefer established homes, even when more generous grants are available for new properties.

He said that during the global financial crisis, the best grants deal for existing homes was $14,000, compared with $21,000 for new properties.

“But if you look at the data for that period, 76 per cent of people still bought established properties,” Mr Kardash told AAP.

“Despite being offered an extra $7000 on new properties, people just opted not to do that.”

He noted there was little available in the new home market for $350,000 or less – the price bracket where first home buyers were active.

He said the loss of the $7000 grant for established homes could also hit activity in that sector, which had been one of the few glimmers of hope for agents in recent times.

He said it was disappointing the Newman government had sought the views of the Master Builders Association on the changes to the grants program, but had not consulted the REIQ.

The Property Council of Australia, which represents property developers, investors and managers, welcomed the changes and said they would help stimulate construction.

“A dollar spent on a new dwelling has a significant and far-reaching multiplier effect in the community, particularly in terms of jobs and retail spending,” Queensland executive director Kathy MacDermott told AAP.

The council said it was hoping the government would use the budget to announce a comprehensive review of all state taxes.

“We do need major reform around our property taxes, including stamp duty,” she said.

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