A pair of brothers wanting to live next door to each other have splashed an eye-watering sum on a rare property in Bayswater.

The siblings were among five bidders who battled for the three-bedroom house on 1180sq m at 4 Grandview Grove, which went to auction on July 20.

Coveted by developers and homebuyers for its size and potential, the property sold for a whopping $1.242 million under the hammer, well above the seller's $1-$1.1 million price hopes.

There were a few developers who did not end up bidding because keen homebuyers pushed up the price and pushed out the competition, according to Barry Plant Boronia agent Keith Wilson.

“The property sold so well because it is one of the few of the larger blocks remaining in the area,” he said.

The buyers plan to knock down the existing brick house and build two homes side by side to accommodate their young families.

“The flat block is in a quiet pocket yet in a central location near schools, shops and the station, which is perfect for them,” Mr Wilson said.

The underbidder was a young family who had similar plans to build two homes on the block, including one for themselves and the other for their mother, he added.

The seller who built the house more than 65 years ago was moving to a retirement village, according to Mr Wilson.

“Her four children who grew up there attended the auction, and they were really happy with the result,” he said.

Another family with a strong emotional connection to their property, parted with it at an auction in Broadmeadows on the same day.

The three-bedroom townhouse at 2/43 Cuthbert Street, was their first home, which they bought in 2010, according to Barry Plant Glenroy agent Richard Ali.

“While they are sad to leave, the growing family are upgrading to a larger home in the area,” he said.

A pair of first-home buyers, including the buyer from the city and the underbidder from regional Victoria, fought it out for the well-presented property that sold for $567,500.

Both bidders were working in the area and were attracted to the affordable price, well-designed courtyard, and the floorplan with a bedroom and a bathroom at ground level, Mr Ali said.

“It’s rare to find a move-in ready three-bedroom townhouse for less than $600,000 these days,” he said.

“You’d be paying much more in surrounding suburbs.”

And in Keysborough, three bidders competed for a three-bedroom house on 529sq m at 81 Darren Road, which sold under the hammer for $825,000.

A first-time investor beat off first and second-home buyers to win the keys to the property, which had potential for development, according to Barry Plant Keysborough partner Chang Wang.

“It’s a basic entry-level home with a backyard large enough for a house extension or a granny flat,” he said.

“The buyer plans to rent out the property and may consider a knockdown-rebuild project in the future.”

Mr Wang said the auction was held inside the house because of the inclement weather.

“It was great to see so many genuine buyers out and about in the rain and cold,” he said.