Watch: 'Chinese sounding name argument' hits a nerve in finance spokesmen's debate

The issue of foreigners owning houses in New Zealand had National's Steven Joyce and Labour's Grant Robertson sparring in last night's election debate between party finance spokesmen in Queenstown.

National's Steven Joyce hit back when Labour's Grant Robertson argued foreigners are speculating on NZ houses because there's no capital gains tax. Source: 1 NEWS

Mr Robertson asked what does New Zealand gain from someone who lives offshore and is never going to come here or live here.

"They're just speculating because we do not have any tax on capital gain," he said.

Mr Joyce said: "This is the old Chinese sounding name argument".

It was a reference to a saga in 2015 when the Labour Party released data that suggested overseas-based Chinese buyers were increasingly purchasing Auckland property.

Mr Robertson hit back, saying Mr Joyce was the one who introduced race into the debate.

"Did I say it's from any country? No I didn't. Don't throw that around," Mr Robertson told Mr Joyce.

Mr Joyce replied" "Well you said foreigners."

The spat raged on with Mr Robertson saying: "You're the one who introduced race, Steven. That's where this discussion gets into trouble when people introduce race into it."

ACT's David Seymour cooled things down, quipping: "Steven, I think you might have got a sore point there."

"I think I might have hit a sore point," Mr Joyce agreed.

Mr Joyce said the number of sales to people who live overseas, many of them Kiwis, is about three per cent.

Greens leader James Shaw said he would support a ban on foreign buyers of Kiwi houses, because we need to ensure there isn't massive inflation as a result of money flowing into housing from offshore.

New Zealand First leader Winston Peters said a capital gains tax will have no effect whatsoever because foreigners are "buying a bolt hole" and don't even put a tenant in, at a time of massive demand for housing and no supply.

ACT leader David Seymour said the most successful country in the world at banning foreign buyers is North Korea, "and the fact of that matter is that's what you've got to do".