The Overseas Investment Office could be in for an overhaul after concerns about the time taken to make a decision over Lochinver Station.
Shanghai Pengxin had agreed to buy the country's biggest dairy farm for $88 million but ministers said there weren't enough benefits for the country.
It took 14 months before the deal was finally blocked, and the owners are angry at the delays.
The Prime Minister admits it is a slow process which needs to change.
"We've got some thoughts about how you might be able to do that in general," he says. "For the most part, we want to make sure if someone wants to invest in New Zealand, and it makes sense and meets the legal tests, we can facilitate that."
Mr Key doesn't believe there will be a backlash against New Zealand by foreign investors, pointing to the Silver Fern Farms deal which is likely to be approved.
Federated Farmers approves of the Government for pulling the plug on the sale, with president Dr William Robinson saying it was the right decision.
"There didn't appear to be any substantial and visible benefit," he says.
Dr Robinson says the sellers can now put the property back on the market, appeal the decision or go back to Shanghai Pengxin to get them to draw up a better deal.