Appreciation refers to the increase in the value or price of an asset over time.
It occurs when the current market value of an asset becomes higher than the price originally paid for by the investor or owner.
Appreciation can result from a variety of factors, including increased demand, inflation, improvements made to the asset, or desirable market conditions.
Common assets that appreciate include real estate, stocks, and collectibles. Appreciation is the opposite of depreciation, where an asset loses value.
For investors, appreciation represents a potential for profit when the asset is eventually sold for more than its original purchase price.