Housing prices and stock prices are generally believed to be intertwined especially in Asian countries where property markets and stock markets are two of the few investment channels available. Hence, analysis of their relationship will be important to policy makers and investors. This paper attempts to perform such analysis in China using both national and city level data. Our results show that cointegration exists between the markets. With Pooled Mean Group analysis, we find that, in the short run, stock market price could hardly explain housing price movements after accounting for factors such as income, rent, and monetary measures. However, in the long run, stock market performance exerts positive impact on housing price. We can therefore conclude the existence of wealth effect among the stock and real estate markets in China in the long term.