The Cumberland St property, which borders the university on three sides, its rear garden flowing on the Union Lawn, was bought for $500,250, including GST. It had a government valuation of $395,00.
Otago University property services director Barry MacKay said the property had ''strategic value'' to the university, as it lay within its campus.
It formed part of a site identified in the campus master plan as ''suitable for future development'', Mr MacKay said.
There were no immediate plans to use the house, due to its poor condition, he said.
According to the real estate listing, the two-storey house was built about 1914 and is a category 2 designated building under the Historic Building Act.
This meant it was deemed to be of ''historical or cultural heritage significance or value''.
