The building industry is forecasting higher costs for new homes in New Zealand because the price of timber is going up.
An increase of between 5% and 10% is expected from February this year.
The timber industry says less work has been done in the past 18 months by forest crews and sawmills as a result of the recession.
This has reduced the supply of wood for domestic consumption, just as the recession is easing and building plans reviving.
Raw logs are being sent to China for processing, where the economy is more robust.
The Registered Master Builders' Federation and the rival Certified Builders Association say this will feed through into higher prices for new houses, which at present cost an average of $1500 a square metre to build.