Melbourne’s CBD market will be flooded with just under 2,000 new apartments in coming years after the Victorian government approved construction of three new skyscrapers.
One project, Australia 108, will have 100 floors and stand 319 metres high.
The tower will be just shy of a record, with Australia's tallest building Q1 standing at 323 metres.
Around 1,105 new apartments will be included in the tower.
Planning minister Matthew Guy said residential construction would help Melbourne avoid a housing crunch.
“By building more homes, we are ensuring we won’t have the drastic and harmful housing shortage Sydney is experiencing,” he said.
However, some experts have suggested Melbourne may be facing an over-supply.
Earlier this year, SQM managing director Louis Christopher warned the Melbourne market had elevated vacancy rates due to over-activity in the construction sector.
Data from SQM shows the vacancy rate in Melbourne is currently at 5.1 per cent, down from a high of nine per cent in January.
Over the past three years, asking rents in the CBD for apartments have dropped by 7.5 per cent.
In Southbank, the rental market is even weaker.
Apartment rents have risen by 7.1 per cent in the past year but are down by 20.4 per cent over the past three years.
Vacancy rates are at 6.1 per cent and have been trending upwards since the beginning of the year.