Two characteristics of the current property market – the difficulty in obtaining finance and the challenges of selling a property quickly – means that cash is still king when it comes to property sales.

“Even though interest rates have reached record lows and asking prices on properties for sale have returned to more market-related levels, only around half of the current bond applications are approved by the banks. The stringent lending criteria of the banks, including steep deposit requirements, as well as affordability assessments in terms of the National Credit Act, continues to make it difficult for buyers to obtain home loans to finance property sales,” explains Adrian Goslett, CEO of RE/MAX of Southern Africa.

“Property sales are also slower compared to the robust sales activity in previous years, in part due to the bank’s tight credit criteria. The latest FNB Property Barometer indicated that the average property remains in the market for 12 weeks before being sold.”

These two factors give cash buyers the upper hand in today’s property market since it is precisely these two issues that are most commonly addressed by suspensive conditions in property agreements of sale.

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