Labour has made a "complete botch" of its housing data, says the Government, calling it the "oldest and dirtiest political trick in the book". 

Housing Minister Nick Smith said he will not be basing housing policy on people's surnames. 

On July 11, Labour's Phil Twyford released figures based on house sales data from 3922 Auckland sales from February to April.

The data has proven contentious, with both Twyford and leader Andrew Little rejecting calls of racism. 

But the Government has been reluctant to comment at length on the issue, until Smith front TVNZ's Q+A a week later. 

He said Labour's move was politically motivated and "wrong". 

"Well I think they've made a complete botch of it. I think it is against the New Zealand way, when you target one ethnic group and say they're the problem.

"It's the oldest and dirtiest political trick in the book.

"A whole number of people, whether it's Mr Li or Miss Young are suddenly targeted on the basis of their name as being the problem for New Zealand's housing affordability," he said.

"What's appalling, is that the Government announces two months ago that it's going to pass legislation that from October, is going to enable us to get really reliable data - why then, did Labour go out with half-baked information... and target one group of ethnic New Zealanders. 

"In my view that was a wrong thing for Labour to do when they new reliable data was only a matter time."

The limited data that was available, painted a different picture. 

"What we do know is that there are 25,000 people who are not resident in New Zealand, who own investment property and are declaring income for rent or claiming costs of those rental properties.

"That in terms of total properties across New Zealand would only be about one or two per cent."

Smith said those figures were unable to be broken down for Auckland.

But new legislation being pushed through parliament would require foreign buyers to hold a New Zealand bank account and IRD number. That would collate a large amount of information from October 1, Smith said. 

"The first thing it's going to tell us is how many... non-New Zealanders - people living outside our country who are not for tax purposes resident in New Zealand - are buying property in New Zealand. 

"That we'll know because they'll be required to disclose an overseas tax number and we'll know the jurisdiction from [which] they come."

But Smith refused to comment on what level of foreign ownership would be concerning to the Government.

"The consistent advice that we've had from Treasury, the Reserve Bank, my own ministry and the Productivity Commission, is that overseas buyers are not having a significant effect on price, that the core issues are supply issues."

It was "perfectly proper" for New Zealand to have an argument about the appropriate level of overseas investment, but it needed to be based on official information. 

"If officials in the key agencies, in a non-political way, were saying actually this is undermining the capacity for Kiwis to get a home, then I would take a different view."

But Smith wouldn't rule out tighter regulations, if the data called for it.

"We'll do it on the basis of good advice and good information, not people's surnames."