Earlier this month buyers were given a price guide of $1.4 million but, due to the level of interest, the guide was revised to between $1.5 million and $1.6 million ahead of the auction.

The first Millers Point terrace went for $1.9 million last week, $600,000 above the price guide.

This latest auction was held at the head office of Di Jones Real Estate in Woollahra with only vetted pre-registered buyers allowed to attend. A crowd of about 80 were packed into the auction room.

An auction attendee advised Domain of the sale price.

Bidding started at $1.2 million and increased in $100,000 increments until $1.8 million.

The winning bidder was a buyer's agent who was acting on behalf of a couple who were also in attendance. The female buyer said "I'm so excited, I have to tell the family".

Members of the Millers Point community were protesting outside the auction, chanting: "Hands off public housing" and "Shame, shame, shame".

The Minister for Finance and Services, Dominic Perrottet, said: "The real estate agent received strong interest for this property, with more than 200 prospective buyers inspecting the premises and more than 60 pre-auction contracts issued."

Disappointed underbidders left quickly through a side gate.

The Colonial Regency-style home at 29 Lower Fort Street was built in 1834 and was previously home to a Medal of the Order of Australia recipient.

After purchasing the lease for $40,000 in 1993, Millicent Chalmers OAM lived in the property for 17 years.

"It is a brilliant place, full of stories and has a real feeling of history," she said.

Millers Point: a community under the hammer

In 2010, the same year she was awarded her medal for service to the community of the Millers Point area, and to aged persons, her lease expired and the government facilitated her relocation to nearby Windmill Street.

When asked about the sale of the home she said she hoped it went "to someone who loves it as much as we loved it".

Although Ms Chalmers is not against the sale of some of the vacant houses that are in need of repair, she criticised the government's move to sell all the public housing in the precinct.

"There is no need to break up a whole community who support each other," she said.

"We do things together, we look after one another, it's like a family."

Ms Chalmers is the former chair of the Millers Point Resident Action Group and will soon be evicted from her home on Windmill Street.

Last week onlookers were stunned when the first state-owned property at Millers Point sold for $1,911,000.

The house at 119 Kent Street originally had a price guide of more than $1 million but that was revised to more than $1.3 million ahead of the auction by selling agent Peter Starr of McGrath.

Were you at the auction? Get in touch with Toby Johnstone at tjohnstone@fairfaxmedia.com.au