The Altmann Avenue property in the city's east was sold by Warrnambool's Ray White real estate for $920,000 on Saturday.

The auction opened at $750,000 on a vendor's bid and slowly crept its way up. A crowd of over 100 people gathered on the street to watch for five minutes as three bidders fought to walk away with the keys.

The successful Warrnambool couple, who have two young children and another one on the way, said they had been eyeing off the property in the lead up to the auction.

"We always said that if it ever came on the market we would be pretty interested," the couple, who wished to remain anonymous, said.

"It's got a lot of character, it's not just another generic house.

"You also can't beat this location for Warrnambool, it's within walking distance to both the river and the beach. And the pool and garden will be great for the kids."

The couple said they were relieved to have won their first auction.

"Two neighbours have already come up to us and introduced themselves and invited us over for a cuppa," they said.

"We already feel really welcome.

"We've lived here 10 years and although you probably have to have been here 50 (years) to be considered a local, it's great that the property will continue to be owned by Warrnambool people, as opposed to a Melbourne buyer."

Ray White auctioneer Jason Thwaites said the property was "very well admired" in the market place.

"It hasn't been sold for 10 years and the current owners have done a wonderful job with sympathetic renovations to keep within the (1960s) period," he said.

"It is located in the exclusive east pocket of the city where we often have people saying they want to live south of the highway, near the river and near the beach. It's quiet, it's peaceful and it's just one of those ideal places to live.

"It is a very popular part of the city."

Mr Thwaites said the property sold above the vendor's expectations of between $820,000 and $900,000.

"It really is a great result," he said.

"The vendors are very happy and the buyers are obviously ecstatic to be moving into the east Warrnambool area."

The property includes a three-bedroom, two-bathroom home, fully self-contained apartment, office or games room, and a studio overlooking a heated pool and spa.

The 1400-square metre property also includes a large garage and carport providing cover for four cars along with workshop and general storage.

Mr Thwaites said it was a good time to sell, with the market place being "quite active".

"We've got quite a few buyers looking around at the moment," he said.

"I think since Warrnambool was announced the most livable city in the country, we've seen a lot of eye balls staring at the city for auction."

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