Labour leader Jacinda Ardern says she was uncomfortable about her party's past focus on house sales to people with Chinese-sounding names, and said Labour would apologise to anyone offended by the controversy.
Under previous leader Andrew Little, Labour released leaked real estate data in 2015 which showed a high proportion of houses were being sold to Chinese buyers, based on their surnames.
"The impact of that was certainly not something I was comfortable with," Ardern told Radio New Zealand this morning.
She said Labour was trying to show that the Government had not acted on the issue of property speculation by overseas, non-resident buyers.
"We thought that was wrong. We maintained that that's wrong. We have a policy on that.
"But we certainly didn't want to see any of our community here in New Zealand feeling targeted as a consequence of raising that issue.
Ardern did not go as far as saying it was racist.
"If anyone felt that it was, then of course we would apologise for that. But that was not our intent."
Prime Minister Bill English said today that it was "a disgraceful episode" and that Labour had "never really retracted from it".
The controversy was "one of a range of difficulties she had inherited" as Labour leader, he said.
Ardern also said she remained committed to Little's plan to reduce net migration to about 20,000 to 30,000 people a year if in Government.
"Our immigration policy remains the same. What I'm very clear on is I'm not fixating on numbers, I'm fixated on meeting the market need."
The party announced plans in June to target low-value university courses, which it says are used as a "back door" to migrate to New Zealand.
Asked about the possible economic impact of an immigration cut, Ardern said the costs were "manageable" and there would not be a "massive hit" to the sector.
She did not have a precise figure, but said the cost of tightening up rules around international education would be in the millions.
"We make no apologies for the fact that if we are removing low-quality courses from our system, that's the right thing to do."
New Zealand's population grew by 100,400 in the year to June, new figures released yesterday showed. Net migration of 72,300 people contributed to this increase.
Ardern said her party was concerned about whether some parts of New Zealand, especially Auckland, could sustain that growth.
"We see this is as an infrastructure issue more than anything else."