The competition in Google and Facebook's case isn't "programmers", but "exceptionally skilled programmers," which is a different good, a much scarcer one and with less diminishing returns than the former.

I'm not aware of the real estate situation in London to make a comment.

London's planning process is dysfunctional, and the housing supply is nowhere near keeping up with demand.

Yes. And in this case, competition (on the demand side) drives up prices.