To understand whether real estate is an important factor to hinder Chinese innovation activities from the rapid growth of investment in the real estate sector

is undoubtedly a research topic with important practical significance for the sustainable development of China's economy. Taking advantage of China's provincial level panel data

making use of land supply as a instrumental variable for real estate investment growth and effectively controlling the endogeneity that may lead to estimation bias

this paper draws the following findings: First

in the provinces where real estate investment is growing faster

the growth rate in innovation and authorized amount of invention patent is lower

which may indicate that the real estate directly impedes the innovation activities. What's more

such a hindrance is more prominent in China's industrial sector. Second

in the case of the rapid investment growth in real estate

China's financial system has further inhibited its innovation activities through bias effect on the term structure of real estate loans. This kind of bias effect has a more prominent inhibitory effect on the innovation activities in China' s industrial sector. This paper not only verifies the investment growth in China's real estate sector→the existence of the direct effect of regional innovation activities

but also verifies the investment growth in China's real estate sector→the loan term structure of financial system→the existence of the indirect effect of regional innovation activities. The empirical findings of this paper provides useful reference for finding feasible policy and even the breakthrough between reasonable development of real estate industry and the implementation of the innovation driven development strategy.