Rotorua's Chinese community will "brush off" Labour's claims Chinese buyers are responsible for the spike in Auckland real estate prices, according to a local multicultural leader.
However, a former Labour Rotorua spokesman believes the comments could exacerbate racism.
This comes after a Weekend Herald report in which Labour's housing spokesman Phil Twyford claimed real estate figures leaked to the party suggest Chinese buyers - identified because their last name indicated Chinese descent - were pricing first-home buyers out of the market in Auckland.
Former Labour Party Rotorua spokesman and local business owner Fraser Newman, who is married to a Chinese woman, said Labour was looking for a scapegoat for the housing crisis. "We need to stop blaming others for complex issues - the housing crisis is a complex issue, it's just picking out a scapegoat. There are far better ways to manage this."
He said the comments could exacerbate racism.
"I find it appalling. While I don't mind the policy per se, it's the way it's been framed - it's a desperate play for attention.
"It goes toward creating racial disharmony, people are now talking about their Asian landlords and how they are having arguments with them and how bad they are and that they are absent but it sounds like they are just ganging up on them because of their race."
Multicultural Rotorua secretary Waitsu Wu said more Chinese immigrants were moving to Rotorua.
She said the Chinese community would brush off negative comments.
"We don't really care. Everybody's got a life to live and we chose to move to New Zealand and are aware of issues we are going to face. It's just a comment, the Labour party is trying to engage the public argument.
"We should look at it in a positive way - it doesn't matter where people come from if they come to our place to create more economic opportunities."
Rotorua Newcomers Network co-ordinator Susana So said you could not make assumptions about people from their last name.
"Some people living in New Zealand might have Chinese sounding names but they have been living in New Zealand for generations - you can't put people into categories by their name. Especially now we live in such a multi-cultural society, you are not limited to your name."