26 September: The battle over the derelict Newtown squat that sold for $1.725 million last weekend has broken into a bitter war of words, with inflammatory messages from both sides posted throughout the building.

Warnings aimed at the new owners have been spray-painted across the facade with the words “Be careful what you bid for” and “Yuppies, developers, investors beware”.

Posters featuring men brandishing weapons saying “If you plan to buy this building, prepare for retaliation” are also plastered on the building.

Less-than-impressed neighbours have countered the resistance message with a poster of their own, labelling the whole saga a “massive dummy spit” by “tantrum throwing freeloaders.”

The quarrel follows a graffiti attack at the weekend on Cooley Auctions in Double Bay, believed to be linked to the property’s sale and the controversial sale of public housing properties in Millers Point.

The property had been a squat for about 13 years until the squatters were dramatically evicted in July by police wearing riot gear after the owner decided to sell the site.

Police were called to the building to clear out protesters last weekend following the auction.

Newtown, like much of the inner west, has experienced rapid gentrification in recent years, with house prices in the area rising sharply.

As a result, some long-term residents have expressed concerns about the changing nature of the once bohemian suburb with a blackboard at the site spelling out concerns.

Despite the rising tensions and the previous “tenants”, auctioneer Damian Cooley from Cooley Auctions said bidders were not deterred.

He said 37 bids were received and the property sold for $525,000 above reserve. “It was a packed room, really competitive bidding,” he said. “The owner would’ve sold for less than it went for.”

He said vandals targeted the Cooley Auctions office at Double Bay, spray-painting the words “SCUM” and “evict the rich”. “That was disappointing,” Mr Cooley said.