Research On Decision Of Real Estate Project Investment Based On Real Option

Real option, as a new theoretical approach, derived from finance option theory, was gradually applied to such fields as investment decision making, financial management, and value assessment. The real option view of real estate refrains from the traditional perspective and stresses the aspects of flexibility and variability. Flexibility equals a range of options an investor can choose from. Against this background the real option approach can supplement the weaknesses of traditional methods by adding an option value to solely NPV-based static value of an investment project. The application of real option to real estate investment decision making is not just a simple negation of the traditional investment analysing methods, but a breakthrough of their limitations and further envelopment on the basis of retaining the essence of traditional investment analysing methods.This text has reviewed traditional investment decision theory and method at first, points out its weak point, and introduces the basic theory of real option , through comparative analysis, has shown the rationality and science of real option. Then it has analysed about real option characteristic of the investment decision of the real estate, structured the frame analysed in real option of real estate investment decision-making, and after considering the influence of the market competition, utilize the game theory thought , has perfected investment frame of real option. Then it has build the real option model and carry on the positive research, this is the key chapter of the text. Finally it has summarized the main research work of this text, has pointed out some issues that real estate enterprises of our country need pay attention to while using the method of real option to carry on the investment decision making of real estate in the future, and has prospected the trends of real option approach research.