Ubuntu: can't create virtual machine with oracle virtualbox


I run ubuntu 16.04 LTS, dual boot with Windows 7.

I am trying to create a virtual guest with Windows 7 (ubuntu host) but it keeps failing, giving me this message:

/home/km/VirtualBox VMs/win7/win7.vdi.

Could not create the medium storage unit '/home/km/VirtualBox VMs/win7/win7.vdi'.

VDI: disk would overflow creating image '/home/km/VirtualBox VMs/win7/win7.vdi' (VERR_DISK_FULL).

VBOX_E_FILE_ERROR (0x80BB0004) MediumWrap IMedium {4afe423b-43e0-e9d0-82e8-ceb307940dda}

To make it clear, i am trying to create the VM in the /home partition, which has almost 80gb free space. I really don't understand why virtualbox considers "disk will overflow".

Any suggestions?

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