David Seymour has compared blocking offshore homebuyers to the North Korean dictatorship.

The ACT Party leader went head-to-head with Labour's Grant Robertson, National's Steven Joyce, the Greens' James Shaw and NZ First's Winston Peters at the ASB Great Finance Debate on Wednesday night.

Mr Peters said with a severe housing shortage, overseas buying laws need to change.

"If we go on thinking we can allow people from Luxembourg, or for that matter, China, or for that matter Japan buy houses in this country without occupying them... then you're fooling yourself.

"It may not sound like a pleasant message to you but you haven't got an answer at all. The answer is getting supply and demand in sync."

Mr Seymour snapped back at Mr Peters, saying barring foreigners oversteps the mark.

"The most successful country in the world at banning foreign buyers is North Korea.

"But if we're gonna be a country that has global links that allows people to invest in a whole manner of things, then you're gonna have some people who, I hate to say it, Winston, don't look like us, and will sometimes buy houses. And that's okay."

Mr Peters fiercely stuck to his guns.

"There are tens of thousands of empty homes in this country. And when I see someone from offshore with 54 homes, I don't think it's a laughing matter."

Meanwhile Labour's Mr Robertson also defended his party's plan to ban foreign buyers, reiterating a possible capital gains tax.

"What does New Zealand gain from someone who lives offshore who is never going to come here, who is never going to live here? They're just speculating.

"And the reason that they're speculating is because we do not have any tax on capital gain. We've got the tax that Steven Joyce introduced, that's the two-year one, which is completely ineffectual."

Mr Joyce said the stats don't back up that argument, with only 3 percent of sellers and buyers from overseas - many of them Kiwis.

Mr Shaw said while that's correct, there's a "huge amount of capital" behind those sales.

"The country is basically awash with cash looking for a safe place to park."

Mr Shaw said with New Zealand's housing shortage, "even a tiny number of [overseas] transactions makes an enormous difference."

Missed the debate? Watch it again here.