Labour leader Andrew Little has stood by the decision to release figures showing a high proportion of Auckland house sales to people with Chinese names, saying it is time to blow the whistle on what is happening in the city.
The use of the data has been criticised by many as racist and "shonky" and Mr Little admitted there had been some backlash.
Labour obtained the leaked data of house sales by one real estate firm from February to April this year - about 45 per cent of all sales in Auckland over that period.
The party estimated about 40 per cent of the properties were bought by Chinese people, based on their surnames.
Mr Little said while some people had claimed it was racist, several Aucklanders had applauded it.
"If the feedback out of Auckland is anything to go by, I expect we'll have a lot of support in the policy we've put up.
"We understood the risks but we thought that having got information that clearly highlights an issue that is consistent with what we've been saying, we made the judgment it should be disclosed. I think people need to know."
He said Labour's critics should be concerned about first-home buyers being squeezed out of the market.
"Our first moral duty is to those who live here, and that includes those of Chinese ethnicity who have chosen to live here, or whose parents or grandparents chose to live here. They are the people we care about."
Housing Minister Nick Smith said he did not give the data any credence and it was "dumb politics" by Labour.
"The National Government in the 1980s made not dissimilar comments about the Pacific Island community. And it took us 20 years to rebuild trust with Pacific Islanders."
He said new rules requiring overseas buyers to have a New Zealand bank account and tax number or to provide an overseas tax number would allow data to be collected on sales. Information likely to be released would include the proportion of sales to foreigners by region, value and type.
He said any form of register or data was imperfect because people often bought property from overseas and moved to live in it later, including returning expats and migrants.
Critics included Chinese Association president Meng Foon, who told Radio NZ it was misleading and fed the "general phobia" about Asian property buyers.
Blogger and data journalist Keith Ng also took exception to the use of surnames to judge the buyers, writing on the Public Address blog site there was no way of telling those from overseas from those people whose families had been here since the gold rush.
"You are encouraging people to question whether ethnically Chinese people ought to be able to buy houses. You are saying people with 'Chinese-sounding names' are dangerous foreigners who will destroy the Kiwi way of life with real estate purchases."
Ashley Church, chief executive of the Property Institute, said Labour housing spokesman Phil Twyford's analysis was a "racist sideshow" and shonky. "On that basis Mr Twyford should be blowing the whistle on Scottish foreign investment in this country - because a large number of Kiwi homes are owned by people who have names starting with 'Mc' or 'Mac'."
Mr Church said an Overseas Investment Office study some years back had shown Chinese well down the list.