A Hughes property described in its listing as a "detonator's delight" sold for $1,397,000 earlier this month.
With graffitied walls, collapsing ceilings, mould throughout and a possum suspected to be living in the roof, the uninhabitable home was destined to be knocked down and rebuilt.
Eleven registered bidders saw it as an opportunity to secure a 726 square metre parcel of land in a coveted suburb.
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Selling agent Brett Hayman of Hayman Partners said the block's zoning expanded its potential.
"It's in what's called an RZ2 zone and it's [approximately] 720 square metres, which means that with ACTLA approval you can potentially build two [properties] on there," he said.
"That's what gave it a little bit of a boost."
Mr Hayman said the bidding came down to three buyers who competed "fiercely" until the hammer fell. A Canberra buyer placed the final bid and secured the property.
It's not unusual to see a rundown home fetch such a high sale price in today's market, Mr Hayman said. Among his most recent sales, a dated Curtin home went to auction on Saturday and sold for $1,421,000.
"It shows you that the properties that are in really poor condition and nearly knock-overs are attracting a lot of bidders because they can actually put their own stamp on it," he said.
Mr Hayman said properties at the other end of the spectrum - fully renovated and "nothing to do other than drop your furniture and hang your clothes up" - are also selling at a premium.
"It's the in-between properties, [that are] sort of half-renovated, and people go, 'Well, why am I paying a premium when I'm going to have to renovate it again?'" he said.
"It's the in-between market that's a little bit softer at the moment."
In another example of how much buyers are willing to spend for land in tightly held suburbs, a three-bedroom O'Connor home sold for $1.75 million on Saturday.
It was the first time the 1950s property, 58 Clianthus Street, had been listed for sale. Seven bidders registered for the auction, with a builder putting forward the winning bid.
Kostya Logvinov of Carter and Co Agents said the new owner has plans to rebuild on the 849 square metre parcel of land.
He said the fact that the property sat among a number of luxury, double-storey homes made it even more desirable.
"There wasn't any big trees on the block, it was a large size and it wasn't too sloped as well. I think it made it very easy for the buyers to be able to pay a premium knowing that they can build a really good home there," Mr Logvinov said.
Canberra recorded its busiest week of auctions, with 254 homes going under the hammer for the week to December 19, according to CoreLogic.
Canberra's preliminary clearance rate was the second highest among the capital cities at 73 per cent.
In its latest market report, CoreLogic analysts predicted auction activity would "slow sharply" this week as Christmas approaches.
There are around 600 auctions scheduled across the capital cities this week, compared to last week's total of 4756.
"Activity doesn't normally rebound until late January or early February, however we could see an earlier start to the season if the December momentum carries through to 2022," the report concluded.
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