Auction at 36 Lake Ave, Ocean Grove.

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Six buyers sparked a bidding war at an Ocean Grove auction that saw an unrenovated beach shack sell $117,500 over reserve.

Melbourne buyers paid $807,500 to secure the three-bedroom house at 36 Lake Ave.

Auction at 36 Lake Ave, Ocean Grove.

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Hayeswinckle, Newtown agent David Sprague said the buyers plan to rent out the home and will look to do a minor renovation.

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Price hopes had been $639,000 to $699,000 for property, set in ‘old’ Ocean Grove.

Auction at 36 Lake Ave, Ocean Grove.

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Mr Sprague said the result took a few people by surprise, including the vendor, and that a crowd of about 50 people had turned up to watch the auction.

Auction at 36 Lake Ave, Ocean Grove.

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He said bidding opened at $600,000 and that the property’s reserve price was set at $690,000.

“It was spirited bidding that went pretty fast,” Mr Sprague said.

“The vendor has owned it since 1975, it was the family home.

“She was delighted and wasn’t expecting that result.”

Auction at 36 Lake Ave, Ocean Grove.

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The house is set on an angle and has two bathrooms, a large lounge room and separate study/sunroom.

Mr Sprague said the residence, set on a 604sq m allotment, offered a great chance for buyers to get into the coastal market.

Auction at 36 Lake Ave, Ocean Grove.

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“Honestly, it is like a time capsule, and hasn’t had anything done to it,” he said.

“We had 60 groups through and 18 groups indicated they were coming to bid.”

The property is across the road from Lake Ave Reserve and close to Blue Waters Lake Reserve, Ocean Grove Golf Club and the Barwon River.

It has a potential rental return of $400 to $425 per week.