Labour leader Andrew Little says if Labour take office non-resident foreigners would be banned from buying existing houses in New Zealand.
The party has released leaked figures showing 40 percent of homes sold at auction in Auckland over a three-month period went to people with Asian surnames - who make up just nine percent of the city's population. Mr Little, though, has rejected allegations of racism in his decision to highlight the impact of Chinese buyers on the Auckland housing market.
He says it's a question of what's best for New Zealanders.
"I have to say I make no apology for our priority being for those who live here and want to get into their first home and who want to get into an affordable home," Mr Little told RadioLIVE.
"Some may be sensitive to the data and the conclusions we've drawn from it, I think the conclusions are justified, I think a change in policy is justified that limits what non-resident foreign buyers can do."
Speaking on the Paul Henry Programme this morning, Mr Little wouldn't reveal which real estate company compiled the figures, but said the party had verified the numbers.
"It covers 4000-odd transactions over a three-month period, so it's a large chunk of the Auckland house sales over that period."
Mr Little says if the Labour Party comes to power it would ban the purchase of existing domestic properties by non-residents within the first 100 days of getting into office.
"A big chunk of the problem is the non-resident foreign buyer who comes into the market, they’re on the end of a phone wherever they are in the world are they're jacking up the prices and making it less affordable.
"If you're a non-resident living overseas in some other part of the world wherever that is and you want a house in New Zealand that you either want to rent or you want to holiday in, then build a new one, but don't compete with locals for the existing houses that everybody's trying to get in to because that's where the more affordable housing tends to be."
Current non-resident property owners would not be able sell their properties to other non-residents if the policy comes into effect, Mr Little said.
Meanwhile, the number cruncher whose research sparked the debate says he doesn't know where the data came from.
Rob Salmond was commissioned to analyse the data, but insists he's in the dark about who leaked the documents.
"Well, I didn't receive directly, I received it through an intermediary and so I don't know whichever real estate firm it came from," he says.
Although he is confident the data and the method used are sound.
Real estate agency Barfoot and Thompson has confirmed it's launching an internal investigation into the possible leak.
The Green Party says any attempt to solve Auckland's housing problem needs to focus on domestic and international buyers rather than focusing on ethnicity.
"Rampant property investment, not ethnicity, is driving up demand for Auckland houses," co-leader Metiria Turei says.
If political parties are serious about changing Auckland's housing market, tax incentives need to be altered to remove the incentive for locals to invest.
"There are more than 300,000 landlords in New Zealand, and up to 40 percent of all Auckland property transactions involve investors," she says.
The party says a "proper" capital gains tax needs to be in place on all property aside from the family home.