What is physical depreciation of a property?

Physical depreciation of a property is the gradual loss of property value caused by physical wear and tear, aging, deterioration, or damage over time. It is one of the most common forms of depreciation considered in property appraisal and valuation.

Common Causes of Physical Depreciation

Aging Construction Materials

Building components such as roofs, walls, flooring, and structural elements naturally deteriorate as they age.

Weather Damage

Exposure to rain, heat, humidity, and other environmental conditions can weaken building materials over time.

Lack of Maintenance

Insufficient upkeep accelerates deterioration and reduces overall property lifespan.

Structural Wear and Tear

Regular use of the property leads to gradual decline in the condition of its components.

Types of Physical Depreciation

Curable Physical Depreciation

This type of depreciation can be economically repaired or restored through maintenance or renovation.

Examples:

• Painting walls
• Replacing broken fixtures
• Roof repairs

Incurable Physical Depreciation

This refers to damage or deterioration that is too expensive or impractical to fully repair.

Examples:

• Foundation settlement
• Severe structural deterioration
• Major aging issues in old buildings

Physical depreciation reflects the natural decline in a property’s condition over time due to wear and aging. Regular maintenance, renovations, and timely repairs can help preserve property value and extend the building’s useful life.