A Manly unit has sold for $1.77 million at auction on Saturday to a local publican who outbid the tenant renting the home, and neighbours from across the road.

The two-bedroom, two-bathroom property at 5/40-42 Pacific Street had a guide of $1.6 million and a reserve of $1.7 million.

Four of the five registered bidders raised the price after an opening bid of $1.65 million placed by the tenant, who had his finance approve just hours prior but dropped out of the race early on.

Bids rose in $10,000 increments between the publican, a young family across the road and another tenant in building. It was one of 924 scheduled auctions in Sydney on Saturday.

The vendors, retirees, are relocating to Crescent Head. The unit last sold for $735,000 in 2013, records show. Manly’s median unit price rose 4.8 per cent to $1,735,000 in the year to September on Domain data.

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Etch Real Estate’s Hugo Ortega said the tenant was eager to secure the unit he was renting but knew he would bow out of the race.

“The buyer is a local publican who intends to downsize in a few years’ time,” Ortega said. “It was important for the vendors to sell today, and they are ecstatic with the result.”

Ortega said five registered bidders was impressive in the current climate, but quality properties will sell at auction.