A slew of bumper sales at the top end is driving the market with some cashed-up buyers paying millions of dollars to knock down ageing houses and build new.
The Reserve Bank of Australia's move last week to cut the cash rate a further 25 basis points to its lowest recorded level is helping fuel the moves.
Three of the four major banks cut their interest rates by 25 basis points by the end of last week with ANZ going further, making a 27-point cut.
RT Edgar director Jeremy Fox said he felt a boom brewing.
"The moment they drop interest rates so low, the market moves, slowly at the beginning, but then it accelerates," he said.
In Malvern, five bidders vied for the right to demolish an ageing 1980s house at 8 Haverbrack Avenue, which sits on a 1134-square-metre block of land.
The property was sold under the hammer, through RT Edgar, for $4.39 million, nearly $400,000 above its reserve price of $4.01 million.
It was not alone. In Canterbury, four bidders pitched for a tired property at 2 The Ridge on an 855- square-metre allotment, pushing it past the $2.12 million reserve to sell under the hammer for $2.41 million.
Jellis Craig director Alastair Craig said the property was somewhat overshadowed by the new house next door at No. 4 that recently sold for more than $6.5 million.
"I suppose if you're paying $2.5 million for the land and spending another $2 million on the house, it makes sense," Mr Craig said.
"When there's low interest rates it's a great opportunity for people to upgrade in the market and it's never been more affordable," he said.
Other big deals sealed during the week include an apartment at the former Mercy Hospital redevelopment opposite Fitzroy Gardens in East Melbourne where apartment 705 fetched around $6.2 million through RT Edgar.
The three-bedroom apartment had been purchased off-the-plan for $5.45 million in 2009 by Carroll & Richardson Flagworld director James Richardson.
RT Edgar also sold an Arts and Crafts-style 1930s property in Toorak at 73 St Georges Road for $5.6 million. The house, on 1488 square metres, had been on the market for some time.
It was matched by another early 1930s house at 20 Heyington Place in Toorak that was sold for slightly less per square metre after auction on Saturday. Home to the Brookes family (descendants of prime minister Alfred Deakin), it was sold for about $6.2 million. It sits in the middle of a large 2043-square-metre garden block and could receive either a lavish extension or face demolition.
The auction, handled by RT Edgar and commercial agents Allard Shelton, was slow to get started and RT Edgar director Warwick Anderson had to wait 15 minutes to get a bid. It was passed in to the second bidder for $6.05 million.
PI 9A Sebastopol St B 9rm 396sqm $1,460,000
lo $1,500,000 res $1,620,000 Wilson Glen
SO 2/13 Glenhuntly Rd B 3rm $556,000 Pride
SO 4/13 Glenhuntly Rd B 3rm $560,000 Pride
SO 4/4 Wattle Av B 4rm strata $567,500 Wilson
SO 63 Malane St 6rm $1,150,000 hockingstuart
ST KILDA EAST
SO 3/4A Meadow St B 5rm strata undisc Gary
Peer & Associates