Definition

Appreciation relates to the increase in the value of a property or an asset, such as stocks, bonds or currency holdings over time. For real estate, appreciation usually refers to an increase in value of a property net of any physical improvements to the property. Appreciation is the most common source for real estate profit, and is only realized through selling or refinancing a property. Appreciation potential refers to the possibility or probability that a real estate investment will increase in value during the holding period. The opposite of appreciation is depreciation, which is a decrease of value over time.