Which appraisal method is primarily based on the cost of construction minus depreciation?

The cost approach is primarily grounded in the idea of determining how much it would cost to replace or reproduce a property, taking into account the current cost of construction and subtracting any depreciation that has occurred. This method is particularly useful for new constructions or properties that are not frequently sold in the market, where comparable sales (as utilized in the sales comparison approach) or income generation (as assessed in the income approach) might not provide reliable data.

By focusing on the cost of construction and adjustments for depreciation, the cost approach provides a clear valuation based on physical and economic factors. It estimates the value based on the "replacement cost" less "depreciation," giving an accurate financial perspective of the property’s value in relation to what it would take to recreate it today. This is why the cost approach is the correct answer to the question.