The property bubble has not burst - to the contrary, price increases of about 20% are likely this year.

The price of luxury houses is showing signs of tailing off but there are encouraging signs that low-to-middle income houses will continue to prop up the market this year.

The latest readings from the FNB Home Loans residential property barometer come at a time when both the property and construction sectors face new challenges as they formulate their transformation charter for presentation to the government in the next six weeks.

According to FNB, the number of sellers who don't get their asking price has risen from 29% in the first quarter of this year to 44% in the second. And 20% of sellers are waiting eight weeks or longer to make a sale. The average is seven weeks compared with five previously.

The number of first-time home buyers has increased to 32% from 26%, most of them in the middle-to-lower range of the market.

The draft charter for the property and construction sectors will be submitted to the government for consideration by the end of this month.

Next month industry stakeholders will be able to make their submissions on the charter.

"The property market has been slow to respond to the need for transformation and empowerment," said Marna van der Walt, chief executive of Gensec Property Services.

"The growth in the industry has exacerbated the shortage of local skills in the more competitive and sophisticated property-management market."

Business Times