The city plans to use the money to "fund expenditures on projects on the City’s budget such as water augmentation [and] social upliftment," mayoral committee member for assets and facilities management Stuart Diamond told Business Insider South Africa.
The 357 square meter plot features a small house with an open-plan lounge kitchen-dining area and a small garden area.
It is situated along Fourth Beach Way.
The bungalow was sold on auction by auctioneers ClareMart after the previous tenant revoked the lease due to deteriorating health.
Diamond said that city's records reflect that the previous tenant had a long-term lease of 20 years with an option to purchase.
"The previous tenant did not exercise this option and did not want to renew the lease for health reasons as he is close to 90 years old."
Diamond could not confirm who the purchaser of the property is.
"The bid was made through a local legal representative," he explained.