Abstract: This paper discussed the relationship between fluctuations of stock & real estate prices and business cycles with model deduction and empirical evidence. A unite model analysing their relationship was found.The findings reveal that stock prices are the lead indicator of macroeconomy; there exists positive relationship between real estate prices and GDP, interest rates & CPI; the fluctuations of real estate prices are consistent with business cycles; and the fluctuations of stock prices greatly lead that of real estate prices.