Research On The Evaluation Methods Of The Real Estate Industry

In recent years the real estate industry has become the focus in China. During the main part of enterprise’s investment becoming complicated and the action of M&A becoming common, how to estimate the real estate industry’s value becomes the new topic and difficulty in the evaluation domain. Because of the short history of the evaluation industry in China, up to now there is not any method which is accepted by everyone about the Chinese real estate enterprise’s value. So this paper is mainly discussing how to evaluate the real estate industry and introduces a new method to value a real estate enterprise by using the theory and the demonstration so that we can find a proper method.First of all, this paper introduces the actuality of the real estate enterprise’s evaluation both at home and abroad. By analyzing the real estate industry’s characteristic and the key factors, this paper puts forward the main problems and difficulties during the real estate enterprise’s evaluation. Then based on the analyzing the three main evaluating methods used now: discount cash flow valuation method, cost method and market method, this paper concludes some advices to improve the evaluation. Thirdly by comparing the interrelated theories and based on the characteristic of the real estate industry, this paper analyzes the factors affecting the real estate industries’cost and income, introduces the risk evaluation theory to adjust the forecasting economic profit of the real estate industry and then uses the discount economic profit model to evaluate the real estate industry. At last by estimating the VANKE’s value, this paper demonstrates the validity of the model.