What is Appreciation?

Appreciation is an increase in the value of an asset over time, caused by factors like inflation, increasing demand, and improvements to the property. A decrease in value, on the other hand, is referred to as depreciation.

In Montreal, homes can be expected to appreciate at an average rate of 4-5% annually. 

How to calculate appreciation: 

Finding the rate at which a home has appreciated over time requires a very simple calculation.

Imagine you bought a house for $200,000 and sold it five years later $250,000. 

To find the appreciation rate, use these two formulas: 

New value – old value = change in value

Change in value ÷ old value = percent of change in value

• $250,000 – $200,000 = $50,000
• $50,000 ÷$200,000 = 0.25 or 25%

The property has thus appreciated buy 25% since its purchase.