The keys at number 119 Kent Street, Millers Point, don't come cheap.

The home’s new owner handed over $1.911 million on Thursday night – well above the $1.3 million pre-auction price guide, and a serious step up from the $77.20 a week the last tenant was paying.

The unrenovated four-bedder was the first state-owned terrace house in the historic Sydney harbourside precinct to go under the hammer, despite protests from locals furious at NSW Family and Community Services plans to move public housing tenants out.

Family and Community Services Minister Gabrielle Upton said the sell-off would help to fund social housing elsewhere in the state.

“This auction is a historic first step in a process that will help make the social housing system more sustainable,” she said in a statement.

“Many of these properties are not fit for social housing and are a drain on the public purse to maintain.”

She said every Millers Point sale would allow three modern social housing properties to be built.

But long-time local resident Barney Gardner has warned prospective buyers a unique community is under threat.

“These homes have been here for over 200 years, they’ve been public housing for over 100 years, homes for the working class, pensioners and welfare recipients … can you have that on your conscience?” he said.

More than 200 groups inspected 119 Kent Street in the first two weeks of its listing.

There are currently five other properties on the market as part of the government’s first tranche of sales in the Millers Point precinct.