You basically described SimCity, but it's not so simple in real world: 1) you can't build high-rise buildings anywhere and must follow zone planing (especially relevant in old Europe cities, where old town located in the core of the city and is strictly preserved). 2) People, especially older, get attached to their homes and don't sell it as soon as land price increases; some homes stay in the same family for generations. 3) Increase of land price doesn't necessarily leads to high-rise apartment buildings, but sometimes to luxury homes with big gardens if it's a beautiful area located in close proximity to the city.