"It's shocking to hear about this ad," the New Zealand Herald quoted Indian Central Association President Harshadbhai Patel as saying on Saturday.
"It's not on. And we should not encourage these kinds of advertisements, especially targeting Asians and Indians," Patel said.
He said he was worried over such explicit discrimination.
"It's disappointing that it happens in a country like New Zealand."
Patel said such ads were rare in New Zealand, but had the potential to damage race relations.
Alistair said he had several reasons for writing the ad.
"The honest answer is that the majority of them do not speak English very well, and I've had problems with communication in the past, where I have tried to tell them that they are doing something wrong and they don't understand," he was quoted as saying.
But he also acknowledged that communication problems were not just an "Indian or Asian thing".
The ad was removed shortly after Alistair, who refused to give his full name, got a call from the daily.
"On the face of it, it sounds like this would have crossed the line," a TradeMe spokesman said.
"If anyone has concerns about listing, we encourage them to hit the community watch button (on every listing) so our team can take a look."
He said TradeMe would consider its legal position, based on the Human Rights Act, but would also "make a call based on the TradeMe community's reaction."