It encourages supply and liquidity in the market. Individuals will see an opportunity to undercut the large investors if they're hoarding property, so will buil

It encourages supply and liquidity in the market. Individuals will see an opportunity to undercut the large investors if they're hoarding property, so will build new property if they can't get their hands on existing properties. And if it is no longer feasible they're likely to sell rather than hoard for property appreciation.