The clown and another person were arrested.
Students from surrounding flats told photographer James Gunn that the machete was actually a piece of wood that looked similar to a bat.
"They could understand why it might have been mistaken for something more serious due to limited night [vision] and the 'scare-factor' of clowns at the moment," Gunn said.
Meanwhile, costume hire stores across New Zealand have withdrawn clown outfits and masks from their shelves for Halloween after a recent rash of creepy clown incidents.
A report of a clown scaring children at a Porirua school emerged last week, while Hamilton police are currently hunting two clowns believed responsible for a recent attack on a woman as she walked home from the pub in the early hours.
The 'killer clown' fad has also been linked to a spate of threats and violence in the United States, Australia and the United Kingdom.
British police have warned people against dressing as clowns, with a man in Cumbria dressing as Batman and vowing to chase the creepy characters off.
And on Friday, Swedish police searched for a man in a clown mask after a stabbing in the south of the country.
Similar incidents were reported elsewhere in Sweden, Denmark and Norway.
-Additional reporting AP, Daily Mail
