National's David Bennett says Labour has "no idea" about the housing market as the second week after the Government's changes to tax policy near an end.

Last week, the Government announced it would phase out the so-called "tax loophole" for property investors over four years. Investors responded by threatening to hike rents and pull out of the market.

Speaking to Magic Talk's Sunday Cafe, Labour MP Greg O'Connor said investors had started to pull out of the old housing market, indicating the changes were working.

But Bennett, speaking to Magic Talk alongside O'Connor, disagreed.

"Nah, that's just rubbish," Bennett told host Nickson Clark. "The Labour party's got no idea what the housing market is.

"Investors haven't pulled out of the market … that's just not true."

But O'Connor hit back, accusing National of doing nothing about housing when it was in Government.

"Someone's got to do something - we're going, we're doing something and National sit there and snipe away from the sidelines.

"Don't forget - whatever we did, it wouldn't be good enough and it wouldn't be the right thing. 

"This is a multi-pronged approach which most smart commentators are seeing that it's got the potential to be what it needs to be to get the housing under control."

Prime Minister Jacinda Ardern has defended Labour's housing policy despite backlash from across the political spectrum. She told The AM Show on Monday the tax loophole "needs to go", despite investors threatening to hike rents. 

Asked by host Duncan Garner on Monday if rents will go up as a result of the changes, Ardern said: "We should look at what causes rents to increase; supply issues if there aren't enough rentals - which is why we're incentivising new supply by saying to people, 'if you do want to be an investor - buy a new-build.'

"Let's keep an eye on it - we also had to act, Duncan."

As part of the changes, the Government also increased the bright-line test from five years to 10 - requiring tax to be paid on any gains from a residential property sold within a decade. The family home has always been exempt and new-builds will also be spared.

Also included in the Government's announcement last week, were changes to the First Home Grant and First Home Loan schemes, mainly in the form of higher caps on incomes and property values that qualify.