THIS little worker's cottage in Coppin Street, Richmond, tells the story of Melbourne's booming housing market.

It is also a glaring example of why financial markets think the Reserve Bank board will hit home buyers with another rise in interest rates today.

From 2.30pm today, full coverage of the Reserve Bank's interest rate decision, including comment and analysis.

The house sold for $1 million at auction on Saturday, almost double the $533,000 its owners paid just five years ago and more than four times the $218,000 it sold for in 1996.

The free-standing weatherboard has a courtyard garden, two bedrooms, one bathroom and overlooks a neighbourhood green. A young professional couple beat three other bidders, with help from the parents.