"That way you will be saving and you will know if you can actually afford to pay a mortgage.

"After a year or two, you will not only have savings, but will prove you can live on a budget."

While it is cheaper to rent, you should still save like crazy, he says.

"It is quite reasonable to expect house prices might adjust in 10 years and change the dynamics."

And those who do wait to buy will need to quickly get on top of their debt.

At 35, a 30-year mortgage - that is cutting it pretty fine.

Personal finance expert and Herald columnist Mary Holm also says people should forget about buying a house at the moment and focus on saving.

"I would love to see people not getting too depressed about it," she says.

"Just getting into the mindset that there is another way to do this and it has advantages."

Holm says renting can offer flexibility and avoids maintenance costs.

She believes people who are saving for the longer term should be in KiwiSaver, and if they are already in a scheme, they can invest extra money in other share-based managed funds.

She says people who go down this route will effectively have to save what they would otherwise have put into a mortgage.

But Matthews is not sure it will be that easy for people to save more.

"I'm not quite so convinced," she says, "the reality is, it is very difficult."

She says people on low incomes aren't going to have the spare money to save more for retirement, and even those with enough income may lack the discipline.

"Are you earning enough to save the extra you need if you can't save enough for a deposit?

One of the things about a home loan is that it forces that discipline on you. Some people have it and others not so much. Matthews says that with housing becoming less affordable, there will need to be an acceptance that some people will be renting for life, and the rental market will need to reflect that change.

"We haven't moved to that. The reality is, there will be people that have to rent for their whole life and we have to do that," says Matthews.

She says New Zealand needs to change tenancy laws, to ensure greater security of tenancy.

"I can sympathize with people who are tenants and constantly aware that at any time their landlord might turf them out."

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