Application Of Real Estate Investment Decision Of Real Options

Since2003, our government gradually from the financial, land, tax promulgated a series of policies to curb prices overheating phenomenon. In2008the global financial crisis has prompted quite a number of real estate enterprises withdraw from the market. Scientific and rational investment decision analysis has become the current real estate enterprises need to be addressed. Enterprise has long been the widely used traditional decision-making evaluation method to project the future periods net cash flow and investment decisions for assumptions rigidity, dismissed managers operating flexibility value, as well as enterprises in reasonably applying the uncertainty factors of opportunity value, thus caused the value of the whole project undervalued. Real option evaluation method well make up for the defects of the traditional decision-making evaluation method. The biggest advantage of real option evaluation method is that it is a kind of dynamic evaluation method, it recognizes that the flexible value of management, and that the more uncertain factors, the greater the chance to project the future value. As a developed only in recent decades the investment analysis tool, real option evaluation method provides us with an analysis of the value of project a new train of thought. In this paper, on the basis of predecessors’research results, combining with the characteristics of real estate investment in each phase of the construction project, further study of the real option evaluation method in the application of real estate project evaluation, and build the application framework of real options.This paper aims to through the analysis of actual case, for real estate enterprises to provide a real option evaluation method applied to the reference in project evaluation, so as to enhance the scientific nature and rationality of the real estate enterprise investment decision.This paper research content mainly includes the following aspects:(1) For domestic and foreign scholars on real option evaluation method is put forward, the study on the development and application of a more comprehensive summary, pointed out that in the present real estate market "uncertain" is one of the most remarkable characteristics, that thesis research purpose and research significance;(2) Adopt the method of comparative analysis, combining the characteristics of real estate projects, the traditional limitations in decision-making evaluation method in investment decision of real estate project, and the real option evaluation method to illustrate the superiority, this paper introduces the two types of basic pricing model of real option evaluation method;(3) Introduced the definition and basic types of real options, combining with the characteristics of real estate project construction, the project throughout the life cycle of the common type of real options, and combination of different investment decision-making may contain options types are analyzed and summarized, construct the framework of real option in the specific application, and explains how to determine the parameter;(4) The evaluation method of real options for empirical research. This paper according to the construction of xi’an southwest new clusters of a development project as an example, by using the binary tree model and B-s model, calculate the initial project delay is contained in the option value and growth option value, and the single factor analysis method is used for sensitivity analysis. The evaluation method of real options in real estate investment decision making concrete application has carried on the detailed instructions.