This paper analyzes the role and economic consequences of financial constraints in real estate price transmission． It is found that real estate prices fluctuations have significant effects on corporate financing and investment，and that the diffuse scope of effects depends on corporate financial constraints: when corporate re-al estate value grows，more financially constrained corporations raise more outside debts，have more investment capability，and then are more inclined to overinvest． This paper also finds that real estate price fluctuations can lower the efficiency of corporate capital allocation，and that there is not substantial performance improve-ment after rising corporate real estate value． These findings indicate that there are negative effects in the trans-mission mechanism of collateral asset prices． It is also found that highly constrained corporations show more in-vestment volatility with real estate price fluctuations，suggesting that financial constraints may amplify business cycles fluctuations which is in consistent with Kiyotaki and Moore( 1997) ．