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A critical labour shortage in the building industry could get even worse with the introduction of the Government's overhaul of the sector.

People wanting to build houses or get additions or alternations done could find it even harder to nail down a builder once the national licensing system for building designers, site supervisors and some specialist tradespeople starts.

A slowing economy and a less robust building sector were expected to have increased builder availability, but the new regime is more likely to push up prices and keep labour in short supply.

Statistics New Zealand says that $12.6 billion worth of construction work was done in the year to June, a 6 per cent increase on the previous 12 months. Large firms such as Fletcher Building have been importing skilled labour to meet demand.

The Master Builders Federation estimates people are waiting six to 12 months for a builder and its chief, Pieter Burghout, said thousands of builders would be affected by the changes.

From November next year, certain design and building work must be undertaken or supervised by licensed building practitioners, site supervisors and specialist tradespeople who meet new standards.

The entire sector will become licensed by 2011, forcing many tradespeople to get further education.

The Department of Building and Housing estimates around 28,000 people or 19 per cent of the sector's workforce will eventually become licensed so that standards in the sector are raised and the leaky building crisis is eliminated.

This could force up prices as builders pass on compliance costs to consumers, the department says.

The cost of a builder getting assessed to be licensed, the cost of further training and the cost of the licence itself could be passed on.

But the department emphasised consumers would be better off ultimately because the workforce would be more competent.

Burghout said thousands of builders might be forced to change what they did when the system was brought in.

"There are people who now call themselves builders who shouldn't really call themselves that," Burghout said.

They were often not qualified to work on structural elements of a building.

Once the system changed, they might remain in the sector but build fences or do minor repairs and maintenance instead of putting up new houses, he said.

The federation, which has 1650 member companies employing 15,000 people, is unsure exactly how many tradespeople will be affected.

Unlicensed builders will not be able to work on the structure and envelope of a building.

Under the new system, work on foundations, framing, concrete and steel structure, roofing, exterior cladding, external windows and doors will need to be undertaken or supervised by licensed building practitioners with a specialist or trade licence.

This could stretch the sector's labour force even more, making it harder for people to nail down an expert tradesman.

Business Roundtable executive director Roger Kerr said regulating the sector was "massive political overkill" and part of a worrying economic direction driven by an interventionist Government which did not care about consumers.

Licensing will be progressively introduced during the next five years under a scheme unveiled by Building Issues Minister Clayton Cosgrove in Queenstown in April.

The Government wants to make the sector more professional and rein in what Cosgrove calls "cowboys who strap on a toolbelt".

But he has emphasised he does not want to stamp out the DIY sector. Work still allowed under the new system will be maintenance and repairs such as replacing a weatherboard, building fences, decks and garden sheds, installing a new external window or door, moving one structural wall and putting up a farm building or garage.

Work which will need a licensed builder will be building a new house, changing the use of a building such as turning a garage into a sleep-out, big alterations, additions, extensions and renovations.