The property at 27 & 27A Macfarlan St, South Yarra sold for $2 million. Source: Supplied

No parking, broken tiles and exposed bricks didn’t put off five bidders who competed fiercely for the pair of two-bedroom homes at 27 and 27A Macfarlan St.

The auction started at $1.5 million, brushing away the reserve price of $1.35 million to make way for some serious competition.

A woman snapped up the 300sq m property with plans to knock down both homes and rebuild.

The Macfarlan St property had been in the same hands for the past 50 years. Source: Supplied

Hocking Stuart South Yarra agent Nick Gatacre said the property attracted a lot of interest from families, developers and investors.

“The house itself was completely unlivable,” he said.

“For a property that derelict and unlivable it’s a big price.

“House and land prices in South Yarra have really jumped in the past six months.”

The new owner of 27 & 27A Macfarlan St plans to knock down the homes and rebuild. Source: Supplied

Mr Gatacre said families were looking at buying it for their children, while other buyers wanted to subdivide the property.

“Being two houses on the one title, even though it was unrenovated and had no parking, it might have been a bit of a record for the area,” he said.

A 92 year-old man had lived in the property for the past 50 years, using the second property as a workshop, but had moved to a nursing home recently.

It had a price guide of $1.2 million to $1.3 million.