Application Research On Real Option Approach To Real Estate Investment Decision-making

The reasonable real estate investment not only lays the solid foundation for the economy continually, stably and healthily, but also is the powerful growing approach of economy. Whether the growth of a country's economy is sustainable, and whether the money market is stable, have close relationship with the real estate market. Especially in our country, the supply and demand condition of real estate market, has already been transformed from demand insufficient to gradual and constitutive demand excess. In some areas the growth of real estate investment is still very fast, in most areas the house price rises too quickly. Our government takes the real estate market regulation as the important content of strengthening and improving the macroeconomic regulation, and has taken series of measures. The excessive growth of real estate investment, credit and the land supply is under control. Carrying on the real estate investment decision-making correctly is an important tache of real estate investment, but using real option approach can evaluate real estate project of uncertainty more efficiently. Therefore this article is for the purpose of study the application of real option in the real estate investment decision-making of our country.This article first introduces the connotation, the characteristic and the type of real option. And then it introduces the domestic and foreign study about real option. Then it introduces real estate investment decision-making analysis, and explains the application value of real option in real estate investment decision-making. And then it proposes an application framework of real estate investment decision analysis using real option approach. Finally, it provides some suggestion in using real option approach in real estate investment decision-making of our country.This article applies real option approach in real estate investment decision-making of our country, and provides suggestions in using real option in real estate investment decision analysis of our country, therefore, it overcomes the defect of traditional real estate investment decision-making.