Even if house values (or even 20% deposits) are going up faster than incomes, you can still save towards a house.

Imagine a $1MM house, with a $200K minimum deposit, $135K of household income. If that house goes up by 5% per year ($50K, $10K deposit), your income never goes up, and you save 8% or more of your income towards a down payment, you are still making headway towards the down payment. If you save 15-20% of your income, you are making substantial progress towards the down payment.

Scale the numbers up/down as you wish to fit your particular area/situation, but if the house is affordable by traditional mortgage underwriting requirements, it seems like it's possible to save for the downpayment in scenarios that I explored.