It was a local buyer who finally snapped up the hotly-contested home with two living areas at 39 Henna Street, Warrnambool after a drawn-out auction.

Bidding opened at $660,000 - the top end of the expected buyer range - before strong, early offers reached the reserve price of $700,000 in seconds.

While there were 11 registered bidders in total, the final competition came down to two couples who raised the bid by increments of $1000 and then just $500.

Eventually, the house sold for $876,000.

IN OTHER NEWS:

Homeseeka Real Estate agent Tim Wells said it was an 'outstanding' result.

"It was an outstanding result and a testament to how strong Warrnambool property is and the vendor presenting a good product to the market," he said.

"There are good times to come for Warrnambool real estate. There's been a lot of talk that this year might bring a slight flattening of the real estate market but all signs we've seen at this time and over the Christmas period and with such a hotly contested auction today, we feel the road ahead for Warrnambool and the south-west looks very, very positive still.

"We still have ideal conditions including low interest rates, a shortage of titled land, basically zero per cent vacancy in rentals and a lot of people migrating wanting to call Warrnambool home.

"We have a shortage of housing for people who want to buy it and that's what is going to keep Warrnambool's market strong."

Now just one tap with our new app: Digital subscribers now have the convenience of faster news, right at your fingertips with The Standard:

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content: