First-home buyers were left "disappointed but not surprised" when an art deco apartment in Richmond sold for almost $200,000 above reserve.
About 200 people crowded into an alley behind the period apartment block at 213 Punt Road for Saturday afternoon's auction. One elderly Richmond local who has lived on the street for 66 years said he had "never seen anything like it".
But many of the hopeful homeowners - flanked by their parents and friends - were left groaning with dismay as bidding quickly climbed above the property's reserve price of $620,000.
There was frantic bidding between eight parties vying for the keys to the two-bedroom, renovated unit.
It was one of 1100 auctions scheduled across Melbourne on Saturday. By evening, Domain Group had recorded a clearance rate of 73 per cent from 811 reported results.
Bidding jumped in $10,000 increments until the $700,000 mark, when it dropped back to $5000 and $2500 rises.
Six first-home buyers were among the contenders but they dropped away as bidding approached $800,000. IThe final two bidders left standing were a regional couple looking for a city pad and a Richmond woman wanting to downsize.
The apartment sold to the couple, who live in the Yarra Valley but work in Docklands. "They wanted a town base so they didn't have to drive every day," Mr Wallace said.
The hammer fell at $815,000 - $195,000 over the reserve.
The final selling price came as a surprise to the agent. "The last auction I had like that was in 2010," he said.
But young prospective buyers didn't feel the same way.
"It was disappointing but not really surprising," said 29-year-old Alex, whose cousin bid on his behalf early in the auction.
Currently renting in East Richmond, Alex said the auction wouldn't deter him from continuing with his property search. "But it is a bit disappointing that's what you have to pay to get a property like that," he said.
Mr Wallace said the apartment's location and the quality of its renovation were huge drawcards.
"Period apartments in Richmond in a small block are rare," he said. "I haven't sold another one like this."
The vendors, a young married couple who bought the apartment for $500,000 in 2011, were thrilled with the result.
"There were tears, hugs and champagne," Mr Wallace said.
The couple, who had extensively renovated the apartment themselves, were selling to move into a bigger house they recently bought. "Now they don't have a huge mortgage hanging over their head," Mr Wallace said.
Meanwhile in Northcote, a rundown Californian Bungalow sold for $200,000 above its reserve, fetching $1.52 million at auction.
The buyer, who only saw the house for the first time on Saturday morning, plans to rebuild and flip the property.
The fascia of the house is heritage protected, which had turned off developers but appealed to keen renovators.
"I can't believe it," he said. "The owners are ecstatic."
The house, on a 445-square-metre block on the corner of Osborne Street and Sutch Street, had been in the same family for more than half a century.