There were mansions on big blocks and impressive inner-city houses at auction on Saturday, but the top sale recorded over the weekend was – wait for it – a three-bedroom apartment.

Despite buyers across Sydney having their pick of 675 properties, they erred on the side of caution, with fewer than 70 per cent of properties selling at auction.

But while plenty of homes were passed in, there was strong demand for a rare apartment in the Quay Grand building in Circular Quay, which sold for a whopping $7.11 million.

The three-bedroom, two-bathroom, 242-square-metre property has views over Circular Quay to the Harbour Bridge on one side, and across the Botanic Gardens on the other sale.

Records show the property was advertised for rent in July, for $3500 a week, and July last year for the same amount. It last sold for $3.7 million in October 2012.

Selling agent Etienne West, from Morton Circular Quay, said it was the second-highest sale the building had seen.

He said the undersupply of three-bedroom apartments was a significant factor when it came to the apartment’s popularity, noting there had been just three or four sales in the Quay Grand and Bennelong this year.

There were five registered bidders at the auction, with the winning bidder, a “private lady”, who is expected to move in. Related: Sydney auction clearance rates slumpsRelated: Worst fortnight in 16 months Related: Circular Quay’s new laneway precinct

“It’s a very good size – and freehold building, not a high-rise building. It’s very tightly held.”

The CBD harbourside has seen some impressive sales of late, with the Salteri family revealed as the buyers of the $27 million Opera Quays penthouse, and the penthouse at the Loftus Lane development being snapped up for $17 million in June.

Selling agent Monique Lavers, who is marketing another multimillion-dollar apartment nearby, said the weekend’s result was not unexpected, considering the numbers of owner-occupiers, and particularly downsizers, looking to move into the inner-city harbour area.

“We’re finding that there’s more demand for the higher end apartments – demand for the one-bedroom, investment-sized property has dropped off a bit”, she explained.

“Investors feel like the returns aren’t there for them. But at the higher end, the $3 million-plus mark, they’re owner-occupiers and it’s more of an emotional purchase.”

“It’s becoming the norm – it’s the way our style of living is headed.”

Another apartment with water views making a splash was 6/51-53 The Crescent, Manly, which sold for $2.11 million – $610,000 more than it last sold for, in August 2016, records show.

The cheapest property to sell this weekend was also an apartment – a studio in the popular inner-west suburb of Newtown. It sold prior to auction for $420,000, having last traded for $270,000 in 2011.

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