Property values grow (or shrink) in compounding fashion: each year's change applies to the current value, not the original one. A 3% annual rate does not add 30% over ten years, it adds about 34.4%, because gains build on gains. The formula is the classic: Future Value = Present Value × (1 + rate)^years.
A worked scenario
A $450,000 property assumed to grow 3%/year for 10 years: growth factor 1.03^10 ≈ 1.3439, future value ≈ $604,762, total appreciation ≈ $154,762. If you also invested $30,000 of improvements, your total capital is $480,000 and the gain versus invested capital is about $124,762.
The fiction of constant rates
Real markets move in cycles, booms, corrections, flat years. A constant-rate model is a scenario, not a forecast. The honest use is to run three cases (optimistic, moderate, pessimistic) and check whether your deal still works when the pessimistic one comes true. Institutions like the IMF's Global Housing Watch publish international house-price data if you want to ground your assumptions in observable history.
The property appreciation calculator runs any scenario, including negative rates, and shows the value path year by year.