Which of the following factors typically leads to depreciation in real estate?

Aging of the property is a primary factor that typically leads to depreciation in real estate. As a property ages, various physical and functional aspects begin to deteriorate, which can lead to a decrease in its overall value. This includes wear and tear on the structure, systems, and materials that make up the property. Additionally, older properties may not meet contemporary building codes, energy efficiency standards, or modern buyer expectations, which further diminishes their appeal and market value.

In contrast, increased demand in the location would generally enhance property values by attracting buyers and making real estate more desirable. Major renovations can boost a property's value by improving its condition and updating its features, resulting in potential appreciation rather than depreciation. Fluctuating interest rates can affect the affordability of borrowing but do not directly lead to depreciation; they can impact demand and the overall market conditions but do not inherently reduce the intrinsic value of a property itself.