I live in one of the most expensive towns on the east coast of Australia. I bought a small 3 bedroom/1 bath/sep.toilet house exactly two years ago for 205k AUD (~ $121k) - it was then the cheapest house in town, but still no bad neighborhood, and originally I intended to rent it out...
We then went overseas for 6 months - when we came back the market had gone crazy and we were offered 300k for the same place/same condition.
Now, after some renovations and a lot of sweat and dust, new bath, new paint, new garden, I hope to get somewhere around 430k - 460k AUD for it (450k = $266k) - not bad for spending under 20k
But I still can't afford to built on the block I bought last year for 270k: about a 1/3 acre on the edge of town with some ocean glimpses...
Anything with a real view is now well beyond a million (even for shit boxes), in one estate in a small bay with perfect aspect properties fetch at least 3-4 million, and the consequent annual land tax is more than the rent on a house of similar size elsewhere in town.