Developments in the capital markets and real estate financing are inextricably linked. Due to the high demand for outside capital to finance both commercial and residential property, the finance market is essential to the functioning and stability of the real estate market. As a result of this influence, new financial regulations constitute an important part of the framework within which the property markets must also operate. Since, in Germany, insur-ance companies are the second most important institutional investors after banks, consequences for the real estate sector from the revision of the EU’s Solvency II Directive cannot be excluded. Based on expert interviews and the authors’ own calculations, the present study shows that, as things currently stand, the introduction of Solvency II may indeed impact negatively on the German property market. Unless the new requirements are revised to take account of their practical consequences for business, the German market could lose key stability-seeking investors.