New Zealand opposition embroiled in racism row

New Zealand's main opposition Labour Party denied allegations of racism Wednesday after blaming Chinese investors for pushing up prices in Auckland's red-hot property market.

Amid concerns that houses are becoming unattainable in New Zealand's largest city, Labour released data over the weekend purporting to show that 40 percent of buyers in Auckland were Chinese.

But critics said the data -- based solely on whether the surname of buyers appeared to be Chinese -- was "half-baked", with Housing Minister Nick Smith accusing Labour of "playing the race card".

Labour's housing spokesman Phil Twyford, rejected the allegation, saying he was aiming to promote debate on an important issue, not single out Chinese people.

"If they have perceived this as a criticism of them, it isn't. Our only concern is about offshore Chinese speculators," he told the New Zealand Herald.

The leader of the centre-left party, Andrew Little, said raising the issue of foreign ownership was difficult but needed to be done.

"(It's) always going to be a tricky subject to raise, but the data we had told a pretty clear story," he told commercial radio.

Little said a register of foreign property owners was needed to give New Zealanders an accurate picture of who was buying into the housing market.

"They're sick and tired of losing homes at auction to higher bidders down the end of a telephone line in another country," he said.

House prices in Auckland soared 26 percent to an average NZ$755,000 (US$510,000) in the year to June, while prices outside the city were steady and averaged just NZ$340,000.

The Reserve Bank moved to cool the market in May, warning a property bubble posed a significant risk to the entire economy, but demand remains strong.

Auckland has a population of 1.5 million, about a third of the country's total, and official data shows it is where more than half of migrants to New Zealand settle.

Race Relations Commissioner Susan Devoy said it was simplistic to claim ethnic Chinese were behind the city's price rises.

"Dumbing down complex economic woes and blaming them on an ethnic community whose members are already feeling under pressure is neither new nor unique, but it's always disappointing," she said.

"Chinese New Zealanders deserve better than this and so does anyone keen on actually solving this issue."