The unique auction had heated bidders compete to purchase the first home on offer, 403 Macauley Street, with the successful purchaser offered first shot to buy the neighbouring 399 Macauley Street at the same price.

Three hopeful bidders, one in person and two out-of-town phone-ins, competed throughout the early stages of the auction. But in the end, it was just the two out-of-town operators fighting it out.

From an opening bid of $600,000 for 403 Macauley Street, the price soon increased significantly beyond the $700,000 reserve.

A large crowd gathered in the street to watch the auction unfold, with shocked murmurs echoing as bids reached beyond $800,000, before the successful bid of $840,000 was made.

Auctioning agent Lachlan Hutchins announced the purchaser had chosen to buy the neighbouring 399 Macauley Street property for the same price.

The last time the two modest houses at 403 and 399 Macauley Street went to market, in 2012 and 2011 respectively, they sold for $250,000 and $243,000 according to website date.

The latest sale represents a 236 per cent increase in value for 403 Macauley Street in just nine years and a 245 per cent increase in value for 399 Macauley Street over 10 years.

Mr Hutchins said the $1.68 million sale price was a great outcome.

"It was definitely higher than we were expecting," he said.

"We were on the market at $700,000 so $1.4 million was the reserve for the two, it was certainly a great result."

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The successful buyer is based outside the region and was looking for a development opportunity close to central Albury.

Before the auction, Mr Hutchins told gathered bidders the agency had recently sold all the apartments in the Hamilton building, which showed the strength of the market.

He said the two properties were a combined 2024sqm and the flat land was perfect for the development of six townhouses.

Mr Hutchins said developers could achieve "a very, very good price for townhouses".

Earlier on Saturday, 528 Saunders Avenue, East Albury, sold for $605,000.

In 2015, it sold for $330,000. Saturday's sale marks a 83 per cent increase in value within six years.

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