Jaws dropped when the hammer fell on $7.75 million at the auction of a Darling Point knockdown on Saturday – an incredible $2.75 million above its reserve price of $5 million.

The five-bedroom home at 76 New Beach Road Darling Point was built in 1948 and is ripe for extensive renovation.

Ettiene West of Morton Circular Quay described the auction as something he had not seen in close to 25 years as a real estate agent.

“It was down to the two final bidders – they were going a bit crazy, it was incredible,” he said.

Auctioneer Damien Cooley​ of Cooley auctions said he believed the vendors had set a high reserve.

“We felt the reserve on $5 million was opportunistic at best: the property was valued to $4.5 [million] and feedback was in the early $4 million range,” he said.

He described what happened next as “incredible”.

Bids opened at $4 million, leaping $100,000 increments between four parties, before the field halved at $5.1 million.

“From that point we had two fight it out. One would bid $50,000 and another would trump that with a further $450,000 on top,” Mr Cooley said.

That staggered volley saw an unusual pattern, where $5.55 million quickly became $6 million, and so on, until $7.05 million became $7.5 million in short order.

The underbidder finally bowed out after their last tentative $7.55 million offer was swiftly overtaken, to reach a $7.75 million finale.

Mr Cooley described it as an indication of the new season for the mid to high-range price bracket.

“I think the mid to high-end range, particularly in the eastern suburbs, is strong. We are definitely seeing it sell really well – [there’s] a lot of confidence, particularly in the eastern suburbs,” he said.

When asked about the State Government’s new legislation and focus on transparency in the sector, Mr West admitted agents did “get nervous” when the reserve price and result were so disparate.

“You can hardly stop people bidding,” he said.

“When it did start to go on a bit, to be honest I thought, ‘What? Is this ever going to stop?’ ”

The home had been kept by the one family for 43 years, and is the last unrenovated red-brick on New Beach Road.

“What we saw today is supply and demand in action,” Mr West said.

The property is currently configured as a duplex, with a two-bedroom home on one side, and a three-bedroom home on the other.

All eight who registered to bid on Saturday had planned extensive renovations or even to knock down the dated property. The new owners’ plan is apparently to knock down the house entirely, subject to council approval.