Larger properties with redevelopment potential set the pace in the real estate market on Saturday, but some “buy-and-flip” sellers of small, inner-Melbourne homes crashed out.

In Port Melbourne, two builders copped a $104,000 loss on a derelict cottage they had bought for $964,000 just 16 months ago.

The “time capsule” one-bedroom cottage at 58 Station Street sold for $860,000 to another builder after the original buyers, who bought in June last year, decided not to proceed with a planned renovation.

The reality that some vendors are taking haircuts on property sales was reflected in another low auction clearance rate for Melbourne – 48.2 per cent from 697 reported auctions. It was the fifth week in a row that the auction success measure had fallen below 50 per cent.

Buyers are pushing back against the asking prices of some smaller properties, particularly when they are on cramped blocks or have little scope for expansion or redevelopment.

Saturday’s auction of the 86-square-metre Port Melbourne property, uninhabited for the past six years and lined inside with discoloured 1930s wallpaper, was a case in point.

Only 20 onlookers, mainly neighbours, attended the auction.

The buyer was the sole bidder. The 30-something builder made one bid of $810,000 for the heritage overlay protected dwelling. After the house was passed in for $810,000, he agreed to pay $860,000.

Station Street is one of Port Melbourne’s premier residential addresses, and selling agent Jordan Gravestein, of Cayzer Real Estate, said the sale price reflected straight-up land value.

“The $964,000 last year was just a massively over-inflated price, and we have got exactly what it is worth in today’s market,” he said.

Agents say well-located, larger family homes on big blocks and A-grade land sites are the hottest commodities in Melbourne’s property scene.

But, there’s also no doubt that buyers are increasingly picky, and don’t expect price rises any time soon. Little wonder that many are prepared to walk away from listed properties they regard as unreasonably priced.

Even so, the consumer confidence in larger homes was on show in Glen Iris at the weekend, when a house held by one family since 1921 went up for grabs.

Before a crowd of 80, Jellis Craig auctioneer Iain Carmichael fielded bids from two keen families before he declared the property selling at its reserve price of $3.7 million. The home sold for $150,000 more – $3.85 million.

Carmichael said the buyer was a young family that planned a major renovation.

He speculated the price may have nudged $4 million if two other prospective buyers had been able to get proper confirmation of their loan finance before the auction.

“It was a rare offering,” he said. “The property was 1100 square metres, north-facing at the rear, and close to three well-known schools: Sacre Coeur, Korowa and Malvern House, the junior school of Caulfield Grammar.

“There are fewer of these substantial family homes on the market, and their prices haven’t softened as much because of that very fact.

“Fewer have been put up for sale this spring compared to last spring. Yet, there is pretty strong demand for them from people moving for schooling reasons.

“I am not saying that they haven’t come off a little in price, but they have come off way less than other sectors of the market.”

Other top real estate sales reported in Melbourne this weekend included a Spanish mission house on 836 square metres at 22 John Street in Kew’s coveted Sackville ward. The property sold for $3.8 million through Buxton, while another house at 5A Kooyongkoot Road, Hawthorn, fetched $3.5 million through Marshall White.

In the south, a home at 41 Bamfield Street, Sandringham, sold for $2,780,000 through Buxton. A contemporary three-bedroom property at 11 Waverley Street, Richmond, fetched $2,650,000 through Abercromby’s. The selling price was $65,000 above the $2.585 million top end of the property’s quote.

But, the most affordable property sold in the city on Saturday didn’t surpass its quote.

The villa unit at 3/414 Blackshaws Road, Altona North, snared $259,000 for Jas Stephens’ vendor, which was just under the $260,000 high end of the quote.