The Australian Greens say extending the boost to the First Home Owners Grant in the coming federal budget won't solve the nation's housing affordability crisis.

"Some people talk about the first home owners grant as if it's a magic wand that will provide long term housing affordability," said the Greens Housing Spokesperson, Senator Scott Ludlam.

"All it really does is provide a windfall to the banks, by encouraging people to take up expensive mortgages they can't necessarily afford."

"There are several issues here: keeping the housing industry healthy, reducing the massive shortfall of public affordable housing and stopping approvals for un-serviced sprawl suburbs to strand low income home buyers in poor quality, energy- and water-wasting homes ."

"In reality, a range of policies are demanded where the expensive experiment with the First Home Owners Grant falls short."

"The welcome spending on public housing announced in the stimulus package is going to keep the construction industry busy, as is the expansion of the National Rental Affordability Scheme."

"This is why the Greens have been arguing that the first Home Owners Grant is poorly targeted - the grant should be means tested and focused on encouraging people to purchase homes that are genuinely affordable, which the WA Government has attempted to do in capping the value of houses that can be purchased under the grant. This means encouraging people to buy homes that are sustainable - energy efficient and linked into transport infrastructure," said Senator Ludlam.

Media contact: Robert Simms - 0417 174 302