Green Light for 38-Storey Mixed-Use Tower on Queensberry Street Signals New Chapter for North Melbourne

Melbourne's planning tribunal has signed off on a 38-storey mixed-use tower on Queensberry Street in North Melbourne, a decision that clears the way for approximately 420 apartments, ground-floor retail and co-working space on a site that has sat dormant since 2021. The approval, issued by the Victorian Civil and Administrative Tribunal on July 1, ends a three-year dispute between the developer, Arclight Property Group, and the City of Melbourne over height limits and setback requirements.

The timing matters. Victoria's housing pipeline has been under sustained pressure, with the state government's Housing Statement — released in late 2023 and still grinding through implementation — setting a target of 800,000 new homes by 2051. Approvals in the inner ring have slowed, partly because existing residents and heritage advocates have successfully challenged developments that push hard against neighbourhood character overlays. This decision, which ultimately overruled the council's initial refusal, may signal that VCAT is now more willing to prioritise density near transit over street-level aesthetics.

What Gets Built, and Where

The Queensberry Street site sits between Errol Street and Abbotsford Street, a stretch of North Melbourne that has seen fitful gentrification over the past decade. The Royal Melbourne Hospital is four blocks east. The proposal bundles 420 dwellings — roughly a 60-40 split between one- and two-bedroom apartments — with 1,200 square metres of ground-floor retail and three basement levels of parking for 180 vehicles. A publicly accessible laneway through the site connecting to neighbouring Curtain Square was a condition the tribunal imposed to secure approval.

The City of Melbourne had argued the tower's 38 floors exceeded the preferred 25-storey maximum under the Arden-Macaulay Structure Plan, the planning framework that covers this patch of the inner north. Arclight countered that the site's proximity to the under-construction Arden Metro Station — just 600 metres away on the North Melbourne station upgrade corridor — justified the additional height. VCAT agreed, citing the state's own density guidelines for transit-adjacent land.

Separately, the development sits less than two kilometres from the Docklands precinct, where oversupply concerns dominated conversations for much of the 2010s. Planners will be watching whether North Melbourne can absorb new stock more cleanly, given its stronger café and services infrastructure along Errol Street and a tighter vacancy profile.

What the Numbers Say

Melbourne's inner-city apartment market has shifted materially since the post-COVID lull. The city-wide unit median sits around $620,000, but one-bedroom apartments in North Melbourne and Parkville have been trading at a premium — several recent sales on Flemington Road and O'Shanassy Street have cleared $650,000 to $710,000, according to CoreLogic data for the March 2026 quarter. New off-the-plan stock in comparable towers in nearby Arden has been launched at $750,000 to $850,000 for two-bedroom configurations, suggesting Arclight will have room to price above recent resale benchmarks.

The approval also lands as stamp duty costs continue to bite buyers across Victoria. A $750,000 apartment in North Melbourne carries a stamp duty liability of roughly $40,070 under the current scale — a figure that hasn't changed since the 2021 thresholds, even as prices have risen. For buyers already stretching to enter the inner ring, the upfront cost remains a significant barrier, which has pushed some demand south toward the Frankston corridor and outer growth areas.

Construction is not imminent. Arclight will need to lodge amended building permit applications, finalise its planning permit conditions and — given current construction costs running at around $3,800 per square metre for high-density residential — secure financing that pencils out. Industry contacts suggest a realistic groundbreaking date of mid-2027 at the earliest, with practical completion unlikely before 2030. Buyers considering off-the-plan purchases on this or similar North Melbourne projects should budget for two-plus years between contract exchange and settlement, and ensure their contracts include appropriate sunset clauses.