A "completely uninhabitable" Sydney house where a woman lay dead for eight years before her body was discovered has sold for $1.105m at auction.

Described by selling agent Corrinne Olsen as a "dilapidated Victorian" possessing "unquestionable opportunity", the 75.88 square-metre block sold at auction on Wednesday to a bidder who wished to remain anonymous.

Ms Olsen said she expected the property to sell for between $700,000 and $800,000 based on previous sales in the area.

"Never did I think for one minute we'd get anywhere near that price, I couldn't believe it," she said.

Ms Wood became known as 'the woman that Sydney forgot'.

In 2011, police discovered the skeletal remains of Natalie Wood, who would have been 86, on the bedroom floor of the house on Kippax Street in Surry Hills.

She had not been seen since 2003, her electricity was disconnected and her social security payments had not been touched.

Ms Wood became known as "the woman Sydney forgot" and prompted calls for changes to the monitoring of the welfare of the elderly.

"A system surely needs to be in place that can identify whether there is something unusual happening," Police Minister Mike Gallacher said at the time.

The mystery of how the death of a woman in a busy neighbourhood could go unnoticed for so long still has some neighbours baffled.

A few have told Ms Olsen they believed Natalie Wood suffered from alzheimer's and had wandered back to the Kippax Street house - her childhood home - where she died.

"It was like walking into a time capsule. It was utterly dilapidated. I cannot imagine anyone physically living there, especially someone of that age, even in 2002," Ms Olsen said.

Neighbours who had lived in the street for 20 years or more and said they had never seen Ms Wood at the address.

She had married and divorced by 25, and was living with her parents who owned the property.

According to a ninemsn report, the anonymous buyer was aware of the history of the house.

"I'm going to try and find her grave and put some flowers on it," he is reported to have said.

Natalie Wood's sister-in-law is the benefactor of the deceased estate.