Housing industry leaders welcomed the doubling of the first homebuyers' grant but some experts warned the package was likely to worsen inflation.
Housing Industry Association managing director Ron Silverberg said the increase in the first homebuyers' grant meant an additional 15,000 new homes would be built over the coming year.
He said the move would pump about $3 billion in revenue into the housing industry.
"It will add more to supply. That moderates price pressure," he said.
"You're also going to have people coming out of the rental market, which will increase supply."
The chief executive of developer and builder AV Jennings, Louis Milkovits, said the package was "brilliant, absolutely brilliant".
"That should get some action back into the market," he said.
Mr Milkovits said there would be "a very significant multiplier effect".
"It will bring forward prospective future demand, which is very good in terms of a pump-priming effect."
Property adviser Monique Wakelin agreed the plan would bring demand forward, but said it was too big and would cause inflation.
"What we have here is a government that has panicked," she said.
She said the government should have waited to see what effect last week's 1 per cent cut in interest rates would have.
"We are going to see a massive influx of demand. Property prices are going to go berserk.
"Affordability is going to go through the floor.
"I have no issue with stimulating demand but it's the manner in which it's been stimulated and the magnitude of the stimulation which is ill-conceived."
Former leading real estate agent Greg Hocking said the move was "a real knee-jerk reaction".
"Housing has a multiplier effect across the economy but I think other sectors will be annoyed at seeing their tax money lining the pockets of a very focused group - the builders," he said.
"It's a very bold move."
"What they were doing before - encouraging people to save money - was a more measured approached.
"It is bringing forward demand so we will get a lag at the other end of it."
"But jobs are what people are most concerned about at the moment."
Property analyst Mark Tan of valuers LandMark White said the package could cause new home prices to rise in the short term.
But he said the buying might not flow through into new construction activity because of the scheme's tight time limit.
He said developers who already had projects underway with price points of under $500,000 could benefit.
"On the ground level I talk every day with developers who are doing it hard because they can't get funding and other developers who are sitting pretty because they're up and running and getting record pre-sales."
