Study On Finance Method Of The Real Estate

Real estate development is closely correlated with financing and fund operation, and the demand of fund in real estate project development is usually mass. Well financing is the key factor in real estate project developing and real estate business operating. External capital market conditions and policy conditions around the business such as stocks and bonds issuance acquirements, national finance policies, and bank innovation tendency, must be considered in real estate project financing decisions. People's bank of china published a document named Note about reinforce credit management in real estate industry further more (No.121) in 2003, which disclosed many problems exiting in real estate business financing. It becomes the most insistent problem for real estate businesses to deal with financing under new policies and conditions. As for financing theory, after research of 30 years, there was biggish progress in theoretic study based on revenue theory, agency cost, and corporation government which have made many instructive effects on business financing decision.Firstly, this paper analyzed the finance conditions around real estate industry, and then discussed problems exiting in real estate business financing and abuses about current financing policies based on financing theories, studied real estate business financing instruments involving bank loan, issuance of stocks, issuance of bonds, and real estate affiance. All of this is to find appropriate financing instruments for business with various internal conditions, to extend business financing channels, and to improve business financing structures.The first chapter of foreword introduced the study background, research methods and organization structure of this paper. The second chapter discussed essential financing theories, involving essential concept of financing, modern essential theory of financing-MM theory, development of MM theory, and modern financing theory based on information asymmetry. The third chapter focused on the analysis of external conditions around business financing, involving compositive analysis of international real estate market, corporation government structures, and supply and demand analysis of national financial capital. The fourth chapter studied the financing instrument of bank loan, aimed at the advantages and disadvantages of business financing through bank loan, and tabled many proposals on innovation direction of real estate businesses and banks in the future. The fifth chapterdiscussed other financing instruments, including issuance of stocks, issuance of bonds, and real estate affiance financing, compared the advantages and disadvantages, development status in quo, and requirements to business of each instruments. The sixth chapter summarized the ways of real estate business financing and the rules should be abided in financing, and explained how to choose favorable financing instruments considering various internal and external conditions of real estate businesses.