Tens of thousands of dollars were spent preparing three St Vincent Place terrace houses for their auctions this month, with the gambit reaping a total $12.3 million.
The houses at 73-77 St Vincent Place, Albert Park, had been connected and modified by the Catholic Church, which had owned them for more than 100 years.
Cayzer Real Estate agent Michael Szulc said work began on the terraces about 12 months ago.
"We had to put them into a position where they could sell independently because they were connected. We had to build internal brick walls, fences, and connect services," Mr Szulc said.
"There wasn't even a staircase in the middle property so there was a lot of work to do," he said.
The work to separate the conjoined terraces was worth doing because there were more buyers in the $4-million-plus range than in the $10-million-plus bracket, he said. "That took about 12 months to be finished and it worked in our favour because the market slowly improved," he said.
Each of the terraces was on a block of about 481 square metres facing north across St Vincent Gardens. They were bought for $10.1 million in 2008 by Fiona Olney-Fraser but Westpac repossessed the properties in 2010.
In the first week, Cayzer sold 75 St Vincent Place for $4.3 million after bidding from four parties. Last week number 73 fetched $3.97 million with five bidders.
On Saturday, another set of five bidders turned up to compete for the last of the terraces, number 77.
Auctioneer Geoff Cayzer started with a $3 million vendor bid just as he did the previous two auctions. The bidding was brisk and came from all corners of the 250-strong crowd. The large house sold after 39 bids for $4.008 million.
"It just shows - the people with money still have it if the right property comes up," Mr Szulc said.
But having enough bidders will not always get a property up to its reserve price. Across the bay in Williamstown three bidders fought for a double-storey waterside property at 100 Esplanade.
The four-bedroom house is at the quiet end of the strip opposite the park.
Williams Real Estate director Michael Harvey said there were about 100 people at the auction, which started with a genuine bid of $1.5 million.
"That was a bit on the low side but the next bid was $1.75 million. After that we had some erratic bidding with amounts as high as $50,000 and as low as $5000 and it passed in at $1.94 million," Mr Harvey said.
It sold after auction for $2.2 million to a local who has jogged past the house for 10 years and long held a desire to live there. "He won't be developing it," Mr Harvey said.
The auction market bounced back over the weekend, recording a clearance rate of 71 per cent from 716 reported results.
Of the 208 properties that passed in, 131 did so on a vendor bid. There are 52 results yet to be reported, which could bring down the final clearance rate. Next weekend the Real Estate Institute expects about 740 auctions.
The state government's move to end the $7000 first home owners grant for established homes will likely trigger a hot run on the low end of the market in the months to the end of June.
The government has announced it will increase the grant to $10,000 but only for newly built homes and apartments costing under $750,000. The new grant starts on July 1.
As part of the overhaul, all first home buyers will receive a 40 per cent cut to stamp duty charges for properties costing under $600,000.
The state government is hoping to bolster Victoria's ailing housing construction sector, which has been in decline for some time.