Southbank’s Newest Apartment Tower: What It Means for the Local Market

A $300 million, 40-storey apartment tower has just been greenlit for 133-141 City Road, Southbank, setting the stage for one of the highest-profile new residential projects in central Melbourne this year. The City of Melbourne approved the application late last month, with demolition on the current commercial site slated to begin this spring.

High Stakes in the Heart of Southbank

The approval lands at a hectic moment for Melbourne's property market, with auction participation tapering off and the median price for inner-city apartments hovering around $670,000, according to CoreLogic's June report. In a city where Bayside and Inner East homes routinely top $2 million, the wedge of new apartments comes as international migration, particularly through Study Melbourne programs, continues to drive up demand for CBD and near-CBD rentals.

Real estate agencies like Marshall White and Belle Property have been tracking a marked uptick in rental inquiries around Southbank and the city’s Docklands precinct. “The appetite is there, but most buyers and renters are desperate for modern amenities and fast move-ins,” said a senior agent at Belle Property. The new City Road tower is aiming to deliver 370 units, with one-bedders projected to start from $590,000 and top-floor penthouses soaring north of $1.8 million, per developers UrbanEdge.

Pipeline Pressure and Local Impact

Planning documents lodged with the Victorian Department of Transport and Planning highlight a ground-floor retail arcade—potentially linking Southbank Promenade to the bustling Australia 108 tower nearby—and a rooftop garden. The inclusion of affordable housing in 30 apartments is also part of the agreement with the City of Melbourne, echoing provisions in the Queen Victoria Market Munro Precinct. With public transport links at nearby Flinders Street Station and tram stops along St Kilda Road, the development is expected to cater to renters looking for car-free city lifestyles.

Latest CoreLogic data shows a 7.5% annual increase in Melbourne’s median apartment values as of June 2026. Vacancy rates across the CBD and Southbank have tightened to 2%, compared to 4% this time last year. Urban planners suggest the tower’s 370 new homes could ease competition for renters—but some analysts, including the Domain Research House, warn that sales off the plan may lag if interest rates keep hovering above 6%.

Work on the site is expected to commence in October, with the first move-ins projected for mid-2028. Prospective buyers and tenants have been urged to keep an eye on pre-sales dates and eligibility criteria for affordable units, usually handled by the Victorian Affordable Housing Agency. Local market conditions are still volatile, so experts recommend budgeting carefully and seeking independent advice before signing onto an off-the-plan contract. For now, all eyes are on Southbank to see if this tower will help take the edge off Melbourne’s tight urban housing market, or simply raise the bar for premium city living.