More than $35 million worth of social housing, including a block of 12 units, was snapped off the market on Wednesday night, in the most profitable Millers Point sell-off to date.

Four terraces and three apartment blocks, which were each sold as a single property, went for a total of $35,220,000, on what was the final auction of former Millers Point social housing by the state government this year.

With all seven properties selling well over the price guide, in particular the block of 12 one-bedroom units opposite Barangaroo Reserve which sold for $12.3 million – nearly $3 million over the guide – the money raised from the latest sell-off surpassed the previous high of $33,805,000, made from the auction of 10 properties in June.

“It was a mixture of buyers, a couple of the terraces sold to owner-occupiers … it’s not just investors going down there,” said Lorraine Crawford of McGrath Estate Agents.

But she noted the blocks of units on Merriman and High Street had seen strong interest from investors, who were drawn to the area because of Barangaroo and its proximity to the city.

“The only rentals really for apartments down there at the moment are in high-rises, so these will offer a different type of property,” Ms Crawford said.

Of the hundreds of social housing tenants living in Millers Point prior to the sell-off announcement in March 2014 just 56 remain, according to the Department of Family and Community Services (FACS). Eighteen of these tenants are in the process of relocating.

The sell-off of the seven properties is a step backwards for Sydney according to John McInerney, of the Millers Point Resident Action Group. He says the government has given up on good town planning for the sake of short-term gain.

“With the older apartments on Merman Street … I can see some justification of selling them off if they want to fix their heritage qualities, they’re not in the best of shape,” he said. “But they really have no arguments for the units in High Street. The properties are in relatively good shape, yes they need some work done, but that’s because the state government hasn’t maintained them for many years.”

He said FACS should be retaining what properties it could in the area to ensure it could meet the increasing demand for social and affordable housing in the inner-city for key workers.

“In the draft plans recently released by the Greater Sydney Commission, they’re suggesting allocating between 5 to 10 per cent of new developments for affordable housing, and they’re facing an argument that this target is significantly less than is should be,” Mr McInerney said. “What’s being done in Millers Point, it’s retrograde. Here they are with a new set of principles coming from a new planning body, but they’re acting against those principles.

“The way the government is going, they’re turning Millers Point into a high-income area. Communities should be of a mixed nature … when you have no segregation by income, race or age, you can have a well-balanced community.”

Ms Crawford said that while wealthy owner-occupiers and investors had snapped up property in the area, there was still a diverse range of buyers.

“Yes some people have spent a lot of money [at Millers Point] but there are also average-income earners that have bought some of the cheaper properties available … there’s a real variation of buyers and a great community vibe already.”

To date, 125 of 293 former social housing properties in Millers Point have gone under the hammer, generating more than $347 million, which has already funded close to 600 of the planned 1500 new government dwellings across Sydney and regional NSW.