Set over two levels on a 1897 square metre block, 81 Mugga Way, Red Hill has all the markings of a Golden Mile home.

It features parking for 10 cars, five bathrooms, a heated saltwater pool and a commercial-grade outdoor kitchen.

Selling agent Mario Sanfrancesco of Blackshaw Manuka said two bidders took part in the auction.

"The bidding stopped a bit short but then I had a discussion with one of them, they adjusted their price slightly and we sold it under the hammer," he said.

The property last changed hands for $1.5 million in 2010 and had been up for sale last year with a different real estate agency.

Mr Sanfrancesco said a move interstate prompted the owners to sell, while the incoming buyer was from the Canberra area.

The home was one of two Mugga Way properties Mr Sanfrancesco took to auction on Saturday. Another five-bedroom home, 65 Mugga Way, also went under the hammer but was passed in.

The home sits on a slightly larger 2081-square-metre block and features two bathrooms, four car spaces, manicured gardens and an expansive terrace.

"It's a really generous parcel of land and it has a great aspect," Mr Sanfrancesco said.

"Whilst it's an older, classic-style home, it has had some really clever refurbishments. For example, it's had all the windows replaced with double-glazed windows and the kitchen and bathrooms are all updated."

Mr Sanfrancesco said expectations for the property are beyond $4.2 million.

"We have buyers looking to live in it, as it is, and then we have others that perhaps in the long term would add some more value to that property," he said.

CoreLogic records show the property last sold in 2007 for $1.6 million.

Mugga Way is synonymous with Canberra's most premium homes. The current record house price in the ACT is held by 25 Mugga Way, which sold for $8 million in 2020.

Ahead of the Reserve Bank's decision on the cash rate on Tuesday, Mr Sanfrancesco said a possible interest rate rise had already been weighing on buyers' minds.

"I think the impact has already taken place," he said.

"There's been talk of interest rates rising in the media for many months now leading up to this election.

"Anyone who had any concerns with their borrowings and are genuine about buying a property, I think had already factored that in, in their capacity to purchase."

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He said a shortage of property stock would continue to play a key role in what happens to the Canberra market.

"There are suburbs that I'm working in where there's lucky to be one house for sale ... so just the shortage of quality properties might just balance out any impact that perhaps the interest rates might have," Mr Sanfrancesco said.

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