We have kids, we're a bit crammed in our current place and we're building a 3x bigger and much nicer place. Location is a small LCOL country in Europe with high foreign income. So, I see your point about naturally needing more room with kids, but there is also a lifestyle upgrade factor for us. We would be comfortable with 2x the space and without modern / luxury finish, spending less than half.

The rent I pay now is 1/12 of the rent I would get charged on the property I'm building. I'm happy paying my current rent, but I would never rent a fancy property and spend all that money with no equity, even if it would be less than 30% of my monthly income.