It is a difficult decision, the prices are going up all the time
That's true, but they are already high and no one will convince me that they are going to reach the British level, because there are no rational reasons for that. In the future they should either grow slower or the whole market will simply collapse at some time - just what happens sometimes on the stock market.
we pay more than we can afford for a small plot in a popular area or buy a large plat in a "normal village".
Hard to say, but If you buy something close to the see, you may try to open some turistic business in the future, It doesn't have to be 50m away from the beach, but 20km is definately too far away for that.
In case of building a house my (not really proffesional) opinion is - definately not right now - there's a real boom on the market and companies often don't really care about consumers, but more companies is investing in construction and government soon should let import foreign workers.
Where are you now Gregorz
I'm in Poland :)