Redfern has a new house price record after the former Imperial Hotel, which became the Redfern Hotel in 1935, sold for an impressive $4.4 million at auction over the weekend.

The property at 88 George Street, Redfern, which was at one point used as an art gallery, had been converted by the sellers into a five-bedroom, three-bathroom residential dwelling.

The home garnered a lot of interest, with over 100 groups coming to view the property, but in the end it came down to just three bidders.

The new owner bought it as an investment property to begin with but has plans to move in later, according to agent William Phillips from Bresic Whitney Darlinghurst.

He said such a large property - with 319 square metres of living space - was hard to come by in inner-city neighbourhoods, compared to the average terrace size of 100 square metres.

88 George Street also came with a DA attached, which Phillips said provided scope to increase the internal space, which was appealing to buyers.

"The industrial or warehouse offerings in the inner city have consistently broken suburb records," he explained, attributing it to the individual nature of properties.

"Buyers with creative flair - they don't want to buy a cookie cutter property. They want something they can add their creative touch to, or one that has already had it added."

The previous record holder, also on George Street, was a former warehouse used to make bombs during World War II. It was ripe for conversion and sold for $3,615,000 in December 2015.

"That was a raw warehouse," he adds. "This one has already been done."

Conversions have also proven to be record breakers over in the inner east. Paddington's most expensive home is the former Windsor Castle Hotel, which reportedly sold for around $13 million in 2015.

A converted garage in Paddington sold for $10 million at the start of this year. In May last year buyers paid $215,000 over reserve for a converted warehouse in Tempe, and a former mechanic's garage in Newtown sold for $2.42 million in February 2016.