Prospective buyers and neighbours covered their noses with their scarves and hands to avoid a waft of the foul stench that filled this unliveable — but heritage protected — Newport house.

Four bidders fought for the dilapidated two-bedroom property at 1 Elphin Street, with a young family living in the adjacent street eventually paying $1.07 million, more than $100,000 above reserve.

It was one of about 1050 auctions scheduled Saturday in Melbourne, with the city recording a clearance rate of 81.7 per cent, with 781 reported results. “The Melbourne market just keeps on keeping on, with yet another strong auction result as the market re-focuses after lengthy holiday breaks over past month,” Domain Group chief economist Andrew Wilson said.

When a man opened the bidding in Newport at $700,000, Jas Stephens auctioneer Terry Fitzpatrick told him he was “two years too late”.

It came down to a two-horse race; an underbidder pacing back and forth while he consulted someone over the phone and a woman bidding boldly as she rocked her baby in her arms.

When the price inevitably edged to a seven-digit figure, Mr Fitzpatrick told the crowd that $1 million used to be a lot of money, but was now within the “domain of first-home buyers”.

A few bids later, a young girl on her bicycle exclaimed “$1,005,000!”, as if she, too, acknowledged that it was a lot of money.

When the young family agreed to $1.07 million, the man on the phone walked away to signal he was out. The reserve was $890,000.

Listing agent Nathan Gleeson told Domain earlier this month there was a possibility new owners could build up for water views, but would have to work with council around the heritage protections. He said the project would undoubtedly be “a big job.”

Next door, a similar property has undergone a full renovation. The rundown property at number 1, on about 477-square metres, is set to experience a similar fate after sitting vacant for about a year.

Mr Fitzpatrick said the sale of the 1930s house was “pretty much pure land value”.

On the other side of town, seven would-be buyers competed for a neat and tidy two-bedroom single-fronted house in Richmond.

Despite the huge crowd that gathered in front of 30 Corsair Street, no one made a sound when Jellis Craig auctioneer Elliot Gill asked for an opening bid, promoting him ask if everyone present were just onlooking neighbours.

Mr Gill broke the ice with a $900,000 vendor bid, and soon, the bids were flowing slowly, but steadily. He ducked inside quickly to consult the vendor at $1.07 million, and returned to announce it was on the market. The reserve was $1.06 million.

A young couple from Prahran, who had been looking for a property over the past six months, snapped it up for $1.21 million.

Mr Gill attributed the strong result to the scarcity of single-fronted Victorian houses in the area.

“It was more than what we were expecting, but that’s fairly common at the moment,” he said. “There’s so few single-fronted homes on the market — in that Victorian style that everyone wants,” he said.