The three-bedroom house in Victoria Street sold for $750,000 prior to auction.

Warrnambool's Stockdale and Leggo sales agent Phil Gray said there had been a lot of interest in the property, which was built in 1891.

He said the owners were looking to sell in the range of $720,000 to $750,000. "This is a great result," he said.

"At the end of the day it's up to the vendor."

Mr Gray said it was the first time the house had been on the market in 51 years and he expected the new buyers to live in it for decades to come.

"They're very passionate about the heritage," he said.

"These houses are not sold very often.

"You're up on the hill but you're only a skip into town."

The sale comes after The Standard reported property values in Warrnambool have spiked in the past 18 months due to soaring demand.

The median price for a house sits at $370,000 compared to about $330,000 less than two years ago.

"We're seeing a very confident market place for the first time in a long time," Ray White Real Estate partner Fergus Torpy said.

The strong demand for properties has resulted in higher prices achieved and less time on the market.