Your reasoning misses the second axis in supply/demand - completely.
Nope. You're making the assumption that all land is equally desirable - that the value in land is in its scarcity and scarcity alone, rather than the value created in properties built locations which are desirable. When you build more property in Victoria, Victoria becomes more desirable and will attract more investment. Real estate is not a perfect market, and the supply/demand curve is not the same as, say, loaves of bread.