The Labour Government is to reconsider legislation allowing wealthy foreigners to effectively buy citizenship, The Guardian has reported.

Labour has already said foreigners will be banned from buying existing homes in New Zealand, as part of several measures to address soaring house prices, but those who have gained citizenship or permanent residency will obviously be exempt.

Housing minister Phil Twyford said a review was not a priority but "uncontrolled foreign investment for the purposes of speculation is actually destructive and it is a feature of a housing market that has utterly failed".

"We haven't announced policy on that [tightening the investment immigration criteria] but I think it is probably something that we are likely to look at," he told The Guardian.

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He expected the ban on foreign buyers would be permanent.

"Our policy, banning people would apply to everybody, regardless of how much money they have or what country they come from.

"We don't see any benefit to people who are not citizens or permanent residents of this country being able to speculate in housing and make a profit at the expense of generation rent."

The review would not affect the controversial case of Paypal co-founder Peter Thiel, a donor to the Donald Trump presidential campaign, who was able to gain citizenship and buy multiple Kiwi properties after spending a total of 12 days in New Zealand.

Thiel told the then-National Government he did not intend to live in New Zealand, but would be an "ambassador" for the country overseas and provide contacts for Kiwi entrepreneurs to Silicon Valley, The Guardian reported.

The decision to allow Thiel citizenship was ministerial, rather than policy, though Twyford said his party was "very critical" of the previous Government's decision.