New data shows first-home buyers are borrowing more than 40 percent more funds than two years ago, and a finance and mortgage expert says such heavy dependence on lending needs to stop.
The new Reserve Bank data shows the average first-home buyer is borrowing a record $390,000 to assist them - up 43 percent from two years ago.
Chris Rapson from Rapson Loans and Finance says the Government needs to be helping to ease the struggle.
"How do we get affordable housing into the market? I think it's a huge question that people in politics and the Reserve Bank, people involved in the financial market, really do need to address."
Mr Rapson says the gap between wages and house prices is far too big and the whole country benefits when people can afford to buy their own homes.
"If they are able to get into home ownership it does add stability to the community," he says.
"People protect their asset, they look after their asset, and they encourage their friends to do the same thing. I think it builds strength in the community."
Mr Rapson says young people are taking on rapidly growing burdens to chase the dream of owning a house, and they can't put their lives on hold waiting for the housing bubble to pop."
"It's a lot heavier burden than their parents had to bear, but at the moment what option do you have?" he says.
"I think I heard the Minister of Finance [Bill English] telling people to be patient, but how long do you need to be patient before you contemplate home ownership?"
New Zealand Initiative executive director Oliver Hartwich says the housing ladder has "lost its bottom rung" and is labelling the current market a crisis.
"We have made it way too expensive for first-home buyers to enter the market," he told Paul Henry on Wednesday.
"We've known this over the last couple of years but over the last couple of years it's got worse."
Mr Hartwich says the obvious fix is to increase the supply of houses, but there's not enough "political will" to make a change.
"What we need to do are a few things at once. We have to deregulate the planning laws - that means we have to get rid of heightened density controls, we have to get rid of the rule on boundary.
"We have to make it a lot easier for councils to develop the infrastructure that is needed to accommodate the new developments."
If nothing is done things will get worse and society will be split into two groups - people who own homes, and people who don't and never will, Mr Hartwich says.
Lending rules generally require a 20 percent minimum deposit.