Land prices change over time and from place to place. It is determined by the price of supply and demand. Higher land prices are caused by decrease in supply or an increase in demand. Land prices generally decrease with distance from the city centre.
In Singapore price is effective tool to allocate the scarce land. Land nearear to the city centre is more expensive.
Advantage of this method:
- Areas in high land value,example city centre can generate high income or profits.
- Open spaces and old buildings in the city have to be demolished to make way for those who have paid for these land areas.
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