Negative equity a risk under Coalition housing deposit plan to underwrite 5 percent deposits for first time borrowers, warns economist Stephen Koukoulas

Economist Stephen Koukoulas warns Scott Morrison's housing deposit scheme runs the risk that borrowers might fall into "negative equity" if the real estate correction worsens. 

Mr Koukoulas tells ABC's Peter Ryan that the scheme comes as banks are tightening lending standards and could create "moral hazard" if borrowers think they will ultimately be bailed out by taxpayers.