For an object to have value it must be scarce in relative to demand, i.e. it has to be limited in supply relative to its demand, this also applies to the case of properties. If an item is in high supply and there is limited demand for it, then ion an economic sense that object has no value. For example, air is useful for many purposes because it is in free supply, it has no economic value.
Apart from being a measure of the relationship between supply and demand of commodities, value also measure the usefulness and scarcity of a commodity in relation to other commodities. Human wants, as generally believed, are limited and the resources to satisfy these wants are scarce. This fact prompts the need for choice among the numerous wants and the relative values attached to such wants will be a reflection of the choice made. Example, if a man wants one commodity more than the other, he will place greater value on the one he wants. Should there be a change in the level of want of a commodity and the resources devoted to satisfy the want so will the relative value of commodities change. In this case, price will be a measure of these relative values in money terms.
In Economics, we learnt that increase in price will lead to increase in demand because some people will prefer to buy substitute commodities rather than pay higher the price. Conversely, increase in price will lead to increase in supply because the producer will want to maximize profit. However, at a point, a level is reached where, theoretically, supply equals demand. At this point, “market price” of a commodity tends to its cost of production or replacement. This behavior is also applicable to the landed property market whether; Commercial, Residential, Agricultural, Industrial, Educational, etc.
Below is a table showing the demand and supply levels and the prevailing prices of two-bedroom flats over a given period in Abuja Metropolis.