"We haven't been that selective yet in deciding region by region but I certainly expect to see Wanganui in the mix. In some areas where the market is smaller - and that includes Wanganui - pulling first-home buyers out of the mix has a huge impact on the market.
"Labour believes home ownership is a good thing and we don't think this Government has thought this through properly," he said.
Mr Twyford acknowledged regional economy was also part of the equation.
"Quality of life in places like Wanganui is superb but without jobs for those home buyers to go to then how can they take advantage of that? For that reason we're going into the 2014 election with regional economic growth as a key election platform," he said.
He said Census data released this week showed home ownership had dropped from 67 per cent to 65 per cent nationally since 2006.
"That's why my bill, if passed, will allow only New Zealand citizens and residents to buy any existing house, flat or apartment."
The Census showed that in 2006 67 per cent of homes in the Wanganui-Manawatu region were privately owned. In the 2013 Census that number had dropped to 65 per cent.
However, Wanganui real estate companies say the new lending restrictions are not having a big impact on the local market.
Tim Hocquard, Ray White Wanganui director, said there were simply not a lot of first-home buyers active in the market here at the moment.