About 25 attendees sheltered from the rain under umbrellas and trees as the Merrivale property went under the hammer.

Two Warrnambool bidders competed for the neat two-bedroom cottage at 90 Davis Street, which is on a 1300 square-metre block.

Bidding opened at $420,000 and rose in $10,000 increments to $470,000 and then $5000 bids, with the property selling for $480,000.

Ray White Warrnambool sales executive Lachie Kelly said it sold at the top end of its $440,000 to $480,000 price guide.

He said the large block, which could be subdivided, was a drawcard with 34 interested parties inspecting the property prior to auction.

Owner Anne Eccles, who would have lived at the property with husband Tony for 50 years in April next year, was emotional to say goodbye but said it was time to move to something smaller.

Meanwhile, a three-bedroom home at 47 Whites Road, which had been extensively refurbished, sold for $587,000 on Saturday.

Ray White Warrnambool auctioneer Fergus Torpy said it started with a strong opening bid of $550,000.

He said bidding went in $10,000 increments to $570,000 and then in $5000 and $2000 bids to reach the final sale price of $587,000, which was within the home's price guide of $550,000 to $600,000.

He said two Warrnambool parties bid for the property, which sold to a family with three young children.

He said people were factoring increased interest rates into their purchasing decisions and there was still "good interest and confidence" in the city.

"There's that natural cycle of buying and selling and in terms of interest rates people have to do a bit more due diligence to factor things in because the prices are substantially higher," he said. "We're at a similar rate to what we were at 10 years ago but the prices have probably doubled."

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