A new designer home in Browns Bay was sold for about two-thirds of its $1 million valuation after its owner put it up for auction with a $1 reserve.
The four-bedroom house at 7 Paterson Mews yesterday sold for $685,000. It had an independent valuation of $1.03 million.
One real estate agent said the downturn in the market was the worst he had seen.
"I can't see the bottom in sight."
About 100 people, including 46 registered bidders, were at the auction.
The $1 reserve meant the house had to sell and would not be passed in.
Auctioneer Alistair Beer said a reputable company had valued the house at $1.03 million within the past 12 months.
Quotable Value last month put the price at $840,000, but Mr Beer said QV figures and independent valuations always differed.
After eight minutes of bidding, the field of potential buyers was down to three.
The winner, Colin Boot, later told the Herald he had been prepared to go to $700,000.
The two-storey house with sea views is on a 473sq m section and has four double rooms, three toilets, two living areas, a gas fireplace, balcony and double garaging.
An English couple who dropped out early in the bidding said they were attracted to the sale because of the $1 reserve.
John and Dawn Stewart had been to three previous auctions at which the house had been passed in.
Mrs Stewart said they had hoped it might go for a silly price, but they thought the sale reflected the state of the property market.
Real Estate Institute figures show house values around the country have dropped an average 6.1 per cent over the past year.
In Auckland, the figure is 4.8 per cent.
Mr Beer said the tiny reserve attracted more registered bidders than would have otherwise been expected.
He said the sale showed there was still interest in real estate, but not at premium prices.
An Auckland real estate agent at the auction who did not want to be named said the house could have fetched more than $900,000 six months ago.
Mr Beer thought the $1 reserve was effective in getting publicity, but it was probably not the best way to market the house to the right buyer.
"The market is so stuffed people are trying everything. I've been through three downturns and this is the worst."
The seller, who did not want to be named, said he was satisfied with the price, although it was "a bit low".
Housing figures for September from the country's largest real estate agency, Harcourts, show the extent of the market's fall.
Sales in the northern region, which includes Auckland, fell 35 per cent from 402 deals last September to 262 deals last month.
The amount of unsold real estate in the region rose 93 per cent, from 1750 properties last September to 3376 last month.
The number of people choosing to sell only through Harcourts fell 16 per cent from 505 exclusive listings last September to 423 last month.