It was one of 750 properties scheduled to go under the hammer in Sydney on Saturday.

By Saturday evening Domain had collected 608 results and put the clearance rate at 84.2 per cent, slightly below last week's 84.4 per cent.

Domain Group senior economist Andrew Wilson said while it was a strong clearance rate, it was the lowest result since Easter.

"We may be tracking down a little bit towards a more sane market," he said.

The two-bedroom house, which measures 2.85 metres wide and is on a 38-square-metre block in Terry Street, sold for $965,000.

While this is well below the suburb's median house price of about $1.5 million, the sale works out at $25,395 a square metre, which would make it more expensive than many larger houses in more prestige suburbs.

A house on 302 square metres in Holdsworth Street, Woollahra, sold last weekend for $3.75 million, which is just $12,417 a square metre.

The opening bid for the small home was $650,000 but competitive bidding from three keen parties saw the price surge.

Some members of the crowd were shaking their heads, while others were laughing as the bids kept coming in.

The winning bidder was buyer's agent Raymond Hung, who was bidding on behalf of a client in China.

The pint-sized terrace certainly packs a lot into those 38 square metres. Two bedrooms are squeezed in upstairs, while on the ground floor are separate dining and living rooms, a small galley kitchen and a combined bathroom and laundry.

You would have just enough room for a three-seat sofa in the living room, but wouldn't want to go larger than a double bed in either bedroom if you wanted space to move.

The terrace also comes with courtyard: but at about one metre wide, you would struggle to fit much furniture outside.

Despite the home's size, selling agent Annie Hodgson of First National Spencer and Servi said there had been plenty of interest before the auction.

The price guide was initially "low $700,000s" but crept towards mid-$700,000s during the campaign.

When asked whether Ms Hodgson thought the current level of prices growth was sustainable she replied: "I don't think so."

The property last sold in 1981 for $54,000.

The first auction on Saturday was a rundown two-bedroom semi at 79 Nelson Street, Rozelle.

Despite the dilapidated state of the home, four investors were actively bidding and pushed the price to $990,000 - $65,000 above reserve.

"It was too much work for first-home buyers," said selling agent Peter Gordon of Cobden and Hayson.

"A builder bought it who will do it up and sell it down the track."

A five-bedroom house with frontage to North Harbour in Balgowlah claimed the highest price paid at auction on Saturday when it sold for $6 million.

The modern three-level house on 444 square metres at 9 King Avenue was sold through Max Walls International.

One of the top sales of the day was a four-bedroom waterfront home at 7 Amalfi Place, Longueville.

A family living in the suburb forked out $4,925,000 to move around the corner -  $425,000 over reserve.

The 1176-square-metre block with a 1960s house had deep waterfrontage to the Lane Cove River.

Selling agent Brent Courtney from McGrath Lane Cove said it was the highest price paid under the hammer for a Longueville property.

"It sets a new benchmark for the suburb," he said.

He expects the new owners will either renovate or rebuild the house.

The Baulkham Hills house price record was smashed on Saturday when a Winston Hills family paid $2.48 million for a near-new house at 41 Park Road -  $430,000 over reserve.

Agent Tamara Wikaruk of McGrath Castle Hill said more than 380 groups inspected the property and 39 registered to bid. The previous record for the suburb was $1.7 million.

Other properties didn't make it to their scheduled Saturday auctions.

A four-bedroom house overlooking Freshwater Beach at 17A Crown Road, Queenscliff was snapped up on Friday night.

"It was an offer too good to be refused," said selling agent Michael Clarke of Clarke & Humel Property.

The home, which sits next door the the weekender of former Westpac boss Gail Kelly, sold for $3.75 million.

"It is the strongest market I've experienced," said Mr Clarke.

- with Anna Anderson