I live in Australia. I used to think Melbourne prices were inflated, so I held back. That was before they doubled. Now they're out of financial reach for me.
Now I have 8 acres of riverfront property in Tasmania, with a lovely house and a stupendous view across the river to the valley yonder. There's enough space for a Feeding Of The 5,000, and my partner and I mostly need not rely on the outside world. I'm extremely lucky and I'm as happy as a pig in muck. I also believe that we may have made a shrewd purchase – farmland may just perform well in future as an asset class.
Price vs value. Consider the value contribution of your prospective purchase to your and your family's lives. If you believe you'll also be a little piggy as a result of the purchase then it's an easy decision. I'll take happiness over money 10 times out of 10… but that's just me.