The reasons behind Southbank’s ghost towers 

At 18 Moray St in Southbank, a 38-level apartment tower stands fully constructed. However, there’s one problem – it is completely vacant and has been for several years.

The $70 million tower, which comprises 115 furnished, ready-to-use apartments, was built and fitted out during the pandemic by a development company owned by gambling junket operator Cheng Ting Kong.

Despite an attempt to sell the property in 2022, it has never been occupied. However, this is not an isolated case, with several buildings across the city – such as the Shangri-La building in the CBD – remaining vacant after construction.

According to RMIT University Professor in Sustainability and Urban Design, Dr Andrew Butt, the issue is that holding costs and land tax do not seem to be enough to deter developers from sitting on properties and sites for extended periods.

“It seems as though it is becoming more and more evident that the problem is not enforcing good design outcomes or community expectations of development, but rather that there are finance issues, holding costs, and labour shortages,” he said.

“It’s disappointing that the [Victorian] government sees the only solution as continuing to hammer away at local government,” he said. “[It is] hammering away at the sorts of checks and balances built into the planning system around objections and design criteria.”

The Speculative Vacancies report released last year by Prosper Australia revealed that in 2023, the number of empty dwellings in the City of Melbourne had almost tripled between 2019 and 2023.

In line with Dr Butt’s concerns, Prosper Australia concluded that long-term reform requires Australia to shift its tax base onto land.

Another issue with the current planning system, as pointed out by Dr Butt, is that the state government has made it easier for planning permits to be approved, despite the risks this presents in the long run.

He believes that this, in addition to high construction costs and labour shortages, has contributed to developers sitting on vacant blocks of land and choosing to delay construction.

This can be seen at 25-35 Power St in Southbank, a site next to STH BNK by Beulah, which has remained vacant for more than a decade, with a long history of proposed developments dating back to 2013.

The most recent proposal in 2021 sought approval for a 52-storey office tower in Southbank, but it was not supported by the City of Melbourne, and no new plans have been submitted to date.

President of the Southbank Residents Association (SRA), Tony Penna, said that it’s “disappointing” to see vacant buildings and blocks remain dormant for such a long period. 

He suggested that the City of Melbourne should explore the option of temporarily activating the site while it remains in permit limbo. •