A Labour government's ban on foreign home buyers would have to exclude South Korean and Chinese nationals until after a free-trade deal renegotiation, leader Jacinda Ardern says.
Labour announced on Sunday that if elected to government, it would bring in a ban on non-residents buying existing houses before Christmas.
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The New Zealand Institute of Economic Research says as a flow-on from the Korean deal, China also gets protection from such a ban under its FTA terms with New Zealand.
Ms Ardern on Tuesday said a Labour government would still bring the ban into law by year's end, but with an exception for countries granted immunity by trade deals.
"It wouldn't prevent your ability to make legislation. It just means there would be carve-outs," she said.
"You could certainly apply the legislation but it just wouldn't be comprehensive until we could renegotiate those deals."
Ms Ardern earlier said she was confident the flow-on effect on the China FTA would also be resolved by altering the Korean deal.
She said she believed a renegotiation with South Korea would not be a major issue.
"I don't believe it would put that deal at risk. Korea already has that provision for themselves. I'm sure they would be very understanding of the rationale of why we would want the same," she told reporters in Auckland.
"Australia signed a deal with that carve-out, Korea signed a deal with that carve-out, New Zealand should have asked for that carve-out. The government didn't, we will."
Labour also says it will not accept the TPP11 trade deal unless there's a carve- out for a foreign buyer ban, despite the current government hoping to sign the agreement before the end of the year without major renegotiation, following withdrawal by the United States.
National's trade spokesman, Todd McClay, said the policy was "Ill-thought out and vague" and put the agreement with Korea at risk.
"It's simply not good enough for Jacinda Ardern to put the economic fortunes of New Zealand at risk along with thousands of jobs and businesses," he said.
Under Labour's policy, non-residents would have to build new homes to own property.
It would not ban Australian buyers, Ms Ardern said.