The housing price boom in China has attracted a large number of non-real estate companies to invest in real estate. In order to reverse this " de-reality” investment structure, the government has introduced a series of regulations to stabilize housing prices, trying to guide companies to transfer funds from real estate to the real industry. However, corporate investment activities are not only composed of operational investments （such as the introduction of new equipment, the purchase of patented technology, etc.） and real estate investment, but also financial investments （such as bonds and stocks）. Then, does the rise in housing prices inhibit financial investment or operational investment? Does the decline in housing prices really lead to a decrease in real estate investment? Studying the relationship between housing prices and investment structure is the main purpose of this paper.

This paper uses the 2009-2017 data of listed companies to calculate the ratio of real estate investment, financial investment and operational investment for each company. Together with the housing price index, we compare the change of investment structure caused by the rise in housing prices and the decline in housing prices. Besides, we do the group test and the interactive variable test to find the mechanism that triggers this change.

The results of this study show that when housing prices increase, companies do not significantly increase the proportion of real estate investment as expected, but increase the proportion of financial investment. When housing prices decrease, companies significantly increase the proportion of operational investment, and reduce the proportion of financial investment, but the proportion of real estate investment is still not sensitive to housing prices. Further analysis finds that the impact of this effect on non-state-owned enterprises is more significant than that of state-owned enterprises. Besides, this effect has a significant performance in the group with high real estate investment but not the group with less real estate investment. Finally, controlling the impact of financial market returns, it is found that the reduction of financial investment is not caused by the decrease of financial market returns, but by the lack of operational investment. After further endogenous testing, similar conclusions are obtained.

The policy implications of this paper may as follows: First, we should optimize the financing environment, establish the credit information system, improve the information disclosure quality, and strengthen the supervision of funds. Second, we should reduce tax and fees, firmly support the market-based reform of interest rates, speed up tax cuts, and further reduce the related costs of enterprises. Third, we should strengthen financial market supervision, reduce arbitrage space, raise investment thresholds, and stabilize investment returns.