City of Melbourne Greenlights 47-Storey Tower on Macaulay Road in Major Win for North Melbourne

Planning Minister Sonya Kilkenny signed off Thursday on a 47-storey residential and commercial tower at 234 Macaulay Road, North Melbourne, handing developer Pace Development Group one of the largest single approvals granted within three kilometres of the CBD in the past two years. The $380 million project will deliver 612 apartments, 1,800 square metres of ground-floor retail and a publicly accessible through-site link connecting Macaulay Road to Langford Street.

The timing cuts against the grain of a market that has grown skittish. Auction clearance rates across metropolitan Melbourne sat at 58 per cent in the final week of June, according to PropTrack figures — a number that would have looked pedestrian during the 2021 boom but now signals genuine hesitation among vendors. Several sellers in the inner north have quietly shifted to expressions-of-interest campaigns rather than risk a passed-in result under the hammer. The Macaulay Road approval lands into that environment as a statement of institutional confidence, even if individual sellers aren't feeling it.

Why North Melbourne, Why Now

The site sits 2.8 kilometres from the Melbourne CBD and borders the Arden urban renewal precinct, which the Victorian Government has been promoting since 2019 as a future knowledge and health employment hub anchored by the Metro Tunnel's Arden Station. That station opened in full commercial service in October 2025, and land values along the Macaulay Road corridor have responded — median house prices in North Melbourne reached $1.21 million in the March 2026 quarter, up from $1.08 million two years earlier, according to CoreLogic data.

The Pace project is not the only one moving. Milieu Property received a permit last November for a 12-storey build-to-rent building at 87 Haines Street, also in North Melbourne, and Urban Rest has been converting older commercial stock along Errol Street into short-stay accommodation. The Macaulay corridor, though, has lagged those pockets because of infrastructure constraints — stormwater easements and a disused goods rail spur complicated title consolidation for years. Pace spent 14 months working through those issues before lodging its application with the Department of Transport and Planning in September 2024.

Forty per cent of the 612 apartments will be designated affordable housing under the Homes Victoria partnership framework, with 80 of those units allocated to community housing provider Housing Choices Australia at a discounted land contribution. That component was pivotal in securing planning support from the City of Melbourne, which had flagged concerns about the building's height overshadowing the adjoining Macaulay Park oval during winter months. A redesign of the tower's northern setback resolved the shadow conflict.

What Buyers and Investors Should Watch

Off-the-plan sales are expected to launch in September through Colliers International, with one-bedroom apartments likely to open around $580,000 and two-bedrooms from $820,000. Those numbers sit comfortably below Melbourne's current detached house median of approximately $920,000 but carry the usual off-the-plan risks — completion is scheduled for late 2029, meaning buyers are betting on three more years of holding costs, interest rate movement and construction delivery.

The approval does not guarantee smooth sailing through to a shovel. Development financing remains the choke point for medium and large projects nationally; several comparable inner-Melbourne towers approved in 2023 and 2024 have yet to break ground because construction-cost inflation kept debt serviceable ratios underwater. Pace has not publicly confirmed its funding structure for Macaulay Road.

For buyers watching the inner north, the practical read is this: if Pace launches in September and achieves strong first-week sales volume, expect competing developers to accelerate dormant applications they have been sitting on along the Arden Station catchment. The Department of Transport and Planning has four other applications within 500 metres of the Macaulay Road site currently under assessment. A strong sales launch would be the clearest signal yet that apartment demand near the Metro Tunnel corridor is real enough to absorb the supply coming down the pipe.