Real Estate :: Capital Appreciation
Appreciation refers to the increase in property value over a period of time. This growth is compounded, so if we used an example of $100,000 Real Estate investment back in 1980 at an average annual growth of 6.4% (Toronto's average), in 2003 that property would be worth $416,541. It is important to keep in mind that there are peaks and valleys within the years recorded. The 6.4% growth is an average of the results over the time measured. Below is a table of data that Canadian Real Estate Association has provided us with to show the growth over 23 years in various Canadian cities. Another observation is that larger cities tend to have higher growth rate: this is as a result of supply and demand.
Average Home Appretiation Per Year Compaunded Annualy
Major Canadian Cities (1980 - 2003) Source: Canadian Real Estate Association
Precentages shown reflect the average growths per year from 1980 to 2003
