Sydney’s crumbling auction market reached a new low on Saturday, recording the lowest clearance rate in years.

There were 873 homes scheduled to go under the hammer on Saturday. By Saturday evening Domain Group had collected 560 results and put the clearance rate at 57.5 per cent – down significantly on last weekend’s 62.6 per cent.

“The market has fallen sharply to another three-year low,” said Domain Group senior economist Dr Andrew Wilson.

He said while homes in inner ring suburbs were still selling, the sluggish performance of the outer regions was “remarkable”.

“That’s what’s really pulling the market down,” he said.

Many of the homes that did sell on Saturday were “renovators’ delights”, which are becoming more popular as opportunities for capital growth dry up.

A crumbling old Victorian house in Leichhardt that hadn’t been lived in for years sold at auction on Saturday for more than $200,000 above its reserve.

“I’ve got completely renovated beautiful homes at the moment but this one had much more interest,” said Santos Sulfaro, of Richardson and Wrench Leichhardt, who sold the Cary Street house to a young family from a nearby street for $1,325,000.

Before the auction he registered 16 bidders for the house that last sold in 1959 for £4200. This was reminiscent of the frenzied auctions of several months ago.

“I would say we’ve had double, if not three times the interest on this property than for any other property we’ve got on the market.”

The reason for strong interest in unrenovated houses was that buyers could see value in them, Mr Sulfaro said.

“There’s going to be very little growth in the market for a while, whereas if you buy unrenovated homes you’re going to be able to create that growth.”

The buyers of the Leichhardt house, Geordie McKenzie and Mellissa Ferguson, had been looking for a larger house for their three young children. Despite its dilapidated condition they liked the wide facade, relatively big block and the quiet street.

“It’s not that we didn’t want a renovated place, but most renovated places you think, ‘I wouldn’t have done that’,” Mr McKenzie said. “You don’t want to pay for something that you’d have to redo.”

It was a different story in Oatley where a fully renovated home at 101 Myall Street passed in at $1.6 million.

The four-bedroom property had attracted 60 groups during the campaign but still fell short. It is now listed for “offers over $1.65 million”.

On the northern beaches, the auction of a renovator’s delight with beach views at 13 Gardere Avenue, Curl Curl, was more successful, selling for $180,000 above the reserve.

A young family from neighbouring Freshwater paid $1.73 million at auction. McGrath agent, Nathan Tse said they planned to renovate the two-bedroom house which is 300 metres from the beach.

Three bidders competed for another unrenovated house at 205 Albany Road, Stanmore, which sold for $1,412,000 through Belle Property Annandale’s Michael Field. The price was $13,000 shy of the reserve.

In North Epping 12 groups registered to bid for a run-down, two-bedroom timber cottage at 125 Norfolk Road that was bought by a family for $1,325,000 – $175,000 more than the reserve.

Catherine Murphy of First National Real Estate Epping said she had given out 25 contracts for what was one of the most popular houses in her area for some time.

“Many local properties have been passing in at auction. It’s quieter than four months ago and inquiry levels have dropped off,” she said.

A semi in Osgood Avenue, Marrickville, that had been in the same family for about 90 years sold through Karen Murphy of LJ Hooker Marrickville/Dulwich Hill for $1,185,000 for more than the undisclosed reserve.

Director of LJ Hooker Marrickville Adrian Abrook said despite the fact that the unrenovated house “needed a lot of work”, 130 people had inspected it and five groups registered to bid at Saturday’s auction.