The Risk Decision-Making Of Real Estate Project

Along with the fast development of the national economy in recent years the real estate market is also growing rapidly. However, behind this high speed development the investment risk is also growing increasingly large. Not only the profits but also potential market changes must be carefully considered in the real estate investment project. This thesis focuses on the following aspects of the real estate project investment risk decision-making: research on basic theories, mathematic models, practice methods, and operation processes.This article attempts to follow this principle: scientific real estate decision-making should be based on the combined study of quality and quantity, both subjective and objective research approaches, and a synthetic consideration of profit and risk. After making an outline of the two factors which mostly restrict the development of real estate - anticipated profit and the investment risk - and the relationship between them, this article uses foreign, advanced mathematical models to deduct a more precise way to make investment decisions. The author also employs advanced technology economy concepts and mathematical theories such as "decision threshold" and "risk-adjusted discount rate", applying them to the context of real estate investment for more accurate decision-making.Working from traditional research methods, this article suggests a new method called "multi-objective decision-making" as a simple and effective alternative to the "decision threshold" approach. This method is mainly concerned with the effect of the risk coefficient on investment decision-making, but it would also organically integrate and standardize both the risk coefficient and the net present value in the real estate investment project.