> Where I lived in Italy, people certainly purchase houses, but they don't expect them to have crazy returns like in the US. It's just a way to not pay rent and have something that you can hang on to even if there's inflation or other funny business (something that Italy has seen a lot of).

Agreed, we didn't buy house as an investment vehicle, we bought it for living expenses consistency over time. It's the speculators that ruin any market.