Investopedia defines "Capital Appreciation" as "a rise in an investment's market price." Take note of the word "market."
For retail buyers of RE, the word "market" pertains to the secondary market.
For example, assume a buyer purchased a pre-selling lot for Php20,000/sqm. Five years later, the Developer still had inventory in the same village and was selling lots for Php40,000/sqm.
The buyer's lot should not be valued at Php40,000/sqm. The lot should be valued based on how much he could sell the property for (IN THE SECONDARY MARKET). Even if the buyer tried selling it back to the Developer, I doubt the Developer would buy it back at Php40,000/sqm.
From experience, secondary market prices are typically 25% to 35% below developers' published prices. So, in the example above, the lot can be estimated to be between Php26,000 and Php30,000. This equates to a 30% to 50% capital appreciation from the time the buyer purchased it (equivalently, a 5.8% to 8.4% annual growth rate–which is within the norm).
I find it misleading to claim a property's value increased significantly by comparing a developer's current price to their old selling price. I get it; the absence of a database for "done" prices makes us want to use whatever data is available (e.g., Developer's published prices).
I'll give you an actual example. A client purchased a pre-selling lot in 2018 for Php30,000/sqm. In 2023, the same Developer was selling lots for Php72,000/sqm. Of course, the owner felt ecstatic, thinking he had doubled his money within 5-years (19% annual "capital appreciation"). He wanted to buy another lot from the Developer, but I advised him not to since I found the price too high.
We tried selling the lot slightly below the Developer's selling price, but there weren't any takers. He kept lowering the price until we eventually sold it at 47,000/sqm (34% lower than the Developer's price). It's still a decent gain (8.5% CAGR), but it's a far cry from the 19% capital appreciation claim.
As enticing as these figures of "capital appreciation" may be, none of the developers' official advertisements mention this because they know it's fallacious.