'Run-down small apartment' with no kitchen sells for $3MILLION - and even the estate agent admits its sale is 'crazy'

Australia's crazy housing market has seen an apartment with no kitchen attract 14 registered bidders and sell for more than $3million.

The two-bedroom unit, in the exclusive Sydney suburb of Mosman, had a guide price of $1.8million, but with six of the 14 people registered making bids, the price went far beyond that.

When the winning bid was made, the unit at unit at 1/53 The Esplanade sold for an incredible $3.31million.

This was far beyond what auctioneer Clarence White expected, who said he was 'gobsmacked' at how quickly the offers escalated.

'It's quite a run down small apartment of only 64sqm,' Mr White told realestate.com.au .

'It was fanatic fast bidding. Things are tough at the moment there's a lot of slow bidding. People are reluctant ... but that was crazy.'

Though the guide price was $1.8million, the bidders showed how serious they were when the first offer was $2million.

Mr White said the leaps in bids from $2million to $3.31million showed why properties are taken to auction.

'Because it is impossible to predict what competition might do on the day and when things go well, the process can achieve a price that no one thought possible.'

The property, which was from a deceased estate, looked even worse before it was listed, David Buttel of Aurora Property said.

They stripped out the old kitchen and window coverings that were falling apart.

Doing so gave the apartment more appeal, with buyers able to see how they might design a new kitchen, he said.

The location, a stone's throw from Balmoral Beach, was the major factor driving the bidding war.

Mr Buttel said most of the bidders were people that could see themselves living in the unit now or at some point in the future.

'If you've got the money to live there you'll take whatever it takes to live there. It was an emotional outcome,' he said.

Another huge pull factor was that the property came with parking - a very valuable asset in Mosman.

'There's a couple other units for sale (in the area), neither of which have parking, and to get a parking spot within a few hundred metres of your apartment on a day like today is really hard.'

But despite the great location and car parking, Mr Buttel still said 'It sold well beyond our wildest expectations.'