Research On The Decision-making Model For Real Estate Investment

The real estate industry in China has flourished for 40 years after the reform and opening-up.As one of pillar industries of the national economy for a long time,it has been playing a very important role in the economy growth and the improvement of people’s life quality.Real estate industry is a capital-intensive industry,which usually requires huge investments and long payback periods with various complicated risks.To ensure the expected return of investment,real estate developers,as leading investors,have gradually established a set of comprehensive investment decision-making methods from historical practices to evaluate the feasibility of an individual real estate development project.However,as China’s economic and social development enters a new stage,the real estate industry has also gradually transited from the old phase of extensive scale expansion to the new phase of industry differentiation and transformation.Under this background,how to select the most ideal project from multiple potential real estate development projects through analysis and evaluation has become an increasingly important topic for real estate developers to work on in the new phase.Taking investment decision-making methods in real estate development projects as the research topic,this paper concretely introduces the research processes and outcomes from three main parts,including theory and methodology,modelling,and application case studies.Firstly,the paper clearly defines the concept of investment decision-making in real estate development projects.Integrated the special feature and investment principles of real estate development project,the paper analyzes the investment decision-making scopes,processes,and key methodologies.The second part of the paper introduces the real estate project investment decision-making model built by the author,using an integrated methodology that combining the analytic hierarchy process and gray relational analysis methods.The model utilized analytic hierarchy process method to build an evaluation index system for investment decision-making in real estate development projects and endow the weight of each index as the first step.Then the gray relational analysis method is used to calculate the correlation among different options and conduct a comprehensive assessment to select the best option.Meanwhile,the session briefly introduces the rank reversal problem that may emerge in the analytic hierarchy process and gray relational analysis methods,and provides a solution for this problem.Finally,in case-study analysis,the model for investment decision-making in real estate development projects built in this research is applied to the process of investment decision-making in the actual project of XX Real Estate Group,confirming the applicability and effectiveness of the model as a scientific method and tool for investment decision-making in real estate development projects.