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appreciation

uh-pree-shee-AY-shun /əˌpriː.ʃiˈeɪ.ʃən/

nounB2GREGMATIELTS

FormalFinancial

An increase in the monetary value of an asset or property over time.

In housing markets, appreciation occurs due to inflation, neighborhood demand, improvements, or broader economic growth.

The story behind the word. From Latin 'ad-' (to) and 'pretium' (price). Originally meaning to set a price, by the late 18th century economic theorists used it to describe how physical property gains intrinsic price value over time.

Word relationships

value gain: Value gain is an informal description, whereas appreciation is the formal financial and economic term.

depreciation: Depreciation is the drop in monetary value over time, while appreciation is the gain in value.

Commonly confused with

appraisal: Appreciation is the actual financial growth in value, whereas appraisal is the expert's evaluation report measuring that value.

Word family

appreciate (verb): To increase in monetary value over time.
appreciable (adjective): Large or noticeable enough to be measured.

Collocations

capital appreciation
home appreciation
appreciation rate
property appreciation
annual appreciation

Example sentences

"Rapid capital appreciation in urban real estate has widened the wealth gap between property owners and long-term renters." Economics
"Homeowners who purchased suburban properties ten years ago enjoyed steady annual appreciation in market value." Real Estate Investment

Memory hook

Your asset APPRECIATES as its PRICE grows UP. Value growing upward over time.

When not to use

Do not confuse with showing gratitude towards someone, although both words share an etymological root.

Fun facts

Land appreciates while physical building structures depreciate due to wear and tear, which is why location matters so much.