We bought our niece a dolls house for Christmas. She was 1 and a bit, probably a bit young in hindsight. But it was half price (from Aldi). Not sure what they've done for furniture - we expected it to sit there while she grew into it but now that we're interstate I don't know what she does with it. I know at first she put her cuddly toys in it. And, I know she's got some furniture for it now.

Friends bought their just over 3 year old an expensive wooden dolls house (open front but movable side panels) with matching furniture, which she loved. Her 18 month old sister loved it too - to chew on, pull apart and rip! So most of the furniture is chewed or broken and the fabric has all been ripped.