An empty lot of land on Godden Cresent, Mission Bay, passed in for $2 million.

Overseas investors are deserting Auckland's property market as the Government crack down on foreign buyers works, but experts say asking prices now remain too high for the remaining local buyers.

Managing director of Strategic Risk Analysis, Rodney Dickens, said the Government changes which came into force at the start of October had worked, driving overseas buyers out of the market.

From October 1, foreign investors were required to provide a New Zealand IRD number, with a New Zealand bank account, and, like New Zealand investors, will have to pay capital gains tax on any investment property bought and sold within two years.

Barfoot and Thompson A house on Aumoe Avenue, St Heliers sold for almost a quarter more than its valuation price.

Dickens agrees with John Bolton, head of Auckland's biggest mortgage broking chain Squirrel, who previously said the absence of Chinese buyers in the Auckland market was already obvious.

But Dickens said people selling property in Auckland had not adjusted their prices down - still leaving local buyers high and dry in trying to afford to buy into the market.

"Prices have been bid up, and what is going to auction now is reflective of that. But the bidders that are willing to pay those prices just aren't there anymore," said Dickens.

Those turning up at auctions remain a mixed bag of ethnicities, with plenty of Asian faces, but it was likely that simply reflected Auckland's cultural diversity rather than offshore Asian investors.

READ MORE: Chinese buyers desert Auckland market, brokers say

At a Barfoot and Thompson auction on Wednesday for homes in central and eastern suburbs more than half of properties up for sale were passed in unsold.

A three-bedroom home on Mountain Road in Mt. Wellington was passed in with no bids, as was a home that sat in the desirable double-Grammar School zone on Basset Road in Remuera.

Another property - an empty lot on Godden Crescent in Mission Bay - was passed in after a bid for $2 million was turned down.

Barfoot and Thompson Auction Manager Campbell Dunoon was more cautious in attributing the drop in auction sales to the property law changes.

"It's difficult to attain that sort of market knowledge - people don't have to tell you why they're buying."

He said if a property did not reach its reserve price at auction, sale could often be negotiated after the auction.

Barfoot and Thompson auction data showed that post-auction negotiations for this the Wednesday auction increased the percentage of property sold from 41 to 54 percent.

Dickens picked that the slump in sales would not force any major fall in house prices though. Low interest rates and sustained demand for Auckland property meant prices were unlikely to drastically fall.

"Demand should still be high enough to justify an upsized sale price," he said.

Big ticket prices were still being paid for some homes. A four-bedroom home on Aumoe Avenue, St Heliers, was snapped up at Wednesday's auction for over $1.5 million - almost 25 per cent more than its valuation price.

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