What is a common reason for a property's depreciation?

Physical deterioration is a significant factor in a property's depreciation because it represents the decline in the physical condition of the property over time. This deterioration can arise from various issues, including wear and tear, lack of maintenance, and environmental factors. When a property experiences physical deterioration, its value can decrease, as prospective buyers will likely factor the cost of repairs and renovations into their purchasing decisions.

In contrast, increased demand and favorable market trends generally result in appreciation rather than depreciation. Urban development can also contribute to property value increases, as new infrastructure and amenities often enhance the attractiveness and desirability of an area. Thus, physical deterioration stands out as a primary cause of depreciation due to its direct impact on the condition and perceived value of a property.