A rundown Brunswick sharehouse in need of a full renovation has sold for $1.4 million under fierce competition at auction.

The unexpected result — $250,000 over reserve — reflects booming house prices in Brunswick, where the median has jumped 60.4 per cent over the past five years to just shy of the magic $1 million, Domain Group data shows.

Despite the polarising green facade, seven hopeful buyers expressed willingness to roll up their sleeves for this three-bedroom Edwardian at 58 Davies Street.

An opening bid of $1.18 million launched the property straight onto the market, with prospective buyers — reluctant to let go of the home — jumping back into the competition after repeatedly saying they were out.

The deceased estate is believed to have been in the same family since it was built in the 1940s and was more recently leased as a sharehouse.

The buyer, an owner-occupier shifting from another part of Brunswick, plans to renovate the property even though the listing says there is potential to “create something new” on the 577-square metre block.

Jellis Craig auctioneer Greg Cusack said there was strong interest in land, and described the home as a blank canvas.

Mr Cusack said Brunswick was attracting more buyers from the east, who believed the area offered “bang for buck” and wanted period homes near great bars and cafes and the CBD.

The growing popularity of Brunswick was again demonstrated when a renovated single-fronted Edwardian house at nearby 327 Albion Street fetched $1.32 million.

The vendors, Mariya Saric and Daniel Ioannidis, bought the three-bedroom property for $311,000 about 11 years ago and did a full renovation in 2012.

Ms Saric and Mr Ioannidis said they were speechless and ecstatic about the result, and pointed to changes in the suburb since they moved in.

“There’s certainly a whole lot more families who have moved into Brunswick particularly in the last five years,” Mr Ioannidis said. “When we first moved in there was more of a younger demographic.”

Nelson Alexander auctioneer Nuno Raimundo had to kick off the auction with a vendor bid of $1.05 million, but three buyers soon pushed the price over the “flexible” $1,175,000 reserve.

The result demonstrated “amazing growth” in Brunswick, which had a change in culture and demographic, he said.

“The older generation are probably moving on, and young families are coming in from the inner city to the Brunswick area, which has become really hip and cool with plenty of cafes and cool restaurants,” Mr Raimundo said.

Across the city in Albert Park, six bidders battled for a double-storey five-bedroom house at 92 Danks Street. It soared about $280,000 above reserve after selling for $3.78 million.

RT Edgar Gerald Betts said a shortage of stock continued to drive demand and house price growth in the bayside suburb.

Melbourne recorded a clearance rate of 79 per cent, with 571 properties of a reported 719 selling under the hammer.

Domain Group chief economist Andrew Wilson said the “remarkably consistent” market had passed another stiff test, but a record super Saturday of auctions loomed next weekend, further testing the market.