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Definition - What does Appreciation mean?

Appreciation can be defined as the increase in the valuation of something, usually a property or any other asset. This increase in value is usually a result of some external economic factors rather than the owner’s contribution to the asset.

Justipedia explains Appreciation

This can be explained with an example of when the property gets valued at more than what it is worth due to inflation or simply because of the increase in market demand. Appreciation is commonly used in the real estate industry. A property purchased in 2005 for $200,000, which is sold for $400,000 in 2014, can be said to be appreciated by 50%.

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