Increasing price of land

When many users compete for the same favorable location, the price of land will rise.
Supply and demand determines price of land.

Price Mechanism- Land prices decrease with distance from the city centre. (Highest rentals are
in the city centre)

Opportunity Cost- it is the cost of decision based on the next best alternative

Advantages:

• The highest bidder gets the land, and thus he will not waste it.
  

Disadvantages:

• It is unfair as lower income people would not be able to afford the land but might
  have better dreams and visions for the usage and the land which in turn may benefit the good of all people.

High land price in Kuala Lumpur due to the high demand for land.

Singapore Context:

Land in Singapore is very valuable. Thus, the competition for land is intense. The nearer the land is to the CBD [central business district] is, the higher the price will be.

Cental business district in Singapore