Major Development Approval Granted Near CBD Will Reshape Inner Melbourne's Housing Supply

Victoria's planning authority has given the green light to a transformative $680 million development on a vacant industrial site at 38 Wells Street, Southbank, marking a significant boost to inner-Melbourne's residential pipeline at a time when first-home buyers face unprecedented affordability headwinds.

The 47-level tower, designed by international architecture firm Grimshaw, will deliver 520 apartments across a mix of studio, one-, two- and three-bedroom configurations, with approximately 15 per cent reserved for affordable housing. The approval comes as median unit prices across greater Melbourne hover near $620,000, pricing out many younger buyers from established suburbs within 10 kilometres of the CBD.

"This is exactly the type of supply-side response Melbourne needs," says Dr Sarah Chen, property economist at the Grattan Institute. "Inner-city developments like this can help stabilise pricing pressure and give first-home buyers realistic entry points closer to employment hubs."

The development will also activate the ground plane with 8,000 square metres of retail, hospitality and community space—a critical requirement imposed by the City of Melbourne planning panel. The site currently sits dormant, bordered by the Southbank precinct to the east, the Yarra River to the west, and walking distance to both Queens Victoria Market and the new Metro Tunnel terminus at State Library.

Completion is scheduled for 2031, with initial settlement expected in late 2029. Pre-sales are expected to open in Q4 2026. Indicative pricing suggests entry-level studios from $485,000 and one-bedroom apartments from $625,000—a modest premium over comparable units in outer suburbs like Frankston or Dandenong, where the corridor continues attracting growth-focused buyers.

The approval also includes 340 car parking spaces and 850 bicycle parking facilities, addressing long-standing criticism that inner-city developments fail to accommodate resident mobility needs. A new public plaza will provide direct access to Wells Street and visual connectivity to the Yarra's parklands.

Planning Minister Jane Gibson stated the project exemplifies Victoria's housing pipeline ambitions, noting that approvals for high-density residential remain robust despite winter auction market volatility. Industry observers, however, caution that while projects like this address supply, systemic challenges around construction costs and interest rates will continue to shape buyer sentiment throughout 2026 and into 2027.

The development consortium includes Cbus Property and international investors, with local construction firm Watpac contracted for build delivery.

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