Melbourne Crackdown Targets Derelict CBD Eyesores

Melbourne’s city council is considering stricter laws to address long-vacant buildings in the CBD and stimulate the area’s recovery.
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Melbourne Crackdown Targets Derelict CBD Eyesores

The City of Melbourne is intensifying efforts to clean up dozens of derelict sites in the central business district, aiming to transform neglected spaces into active developments or public areas. However, these plans face headwinds from ongoing economic challenges that continue to affect developers across Victoria.

Council leaders are examining ways to strengthen enforcement against dilapidated and dangerous properties scattered throughout the CBD. The planning committee has unanimously supported a proposal to increase pressure on property owners. Many of these sites have remained inactive for years, prompting concerns about antisocial behaviour and declining public confidence in the city centre.

Multiple properties across central Melbourne remain empty, despite previously approved development plans. Both local owners and overseas investors are linked to these vacant lots, which range from former car dealerships and unused commercial parcels to shelved high-rise projects affected by rising construction costs, slow planning approvals and reduced office demand since COVID.

One prominent site under review is a 3900-square-metre block on William Street, owned by Melbourne Institute of Technology. Bought for over $17 million in 2009, the site was only cleared this year. Initially planned for a hotel and office tower, the owners now intend to build serviced luxury apartments due to weak demand for office space. Land tax charges of $2 million per year are adding financial pressure to advance the project.

City officials are also focusing on a Southbank site that has been the subject of disputes for over a decade between its international developer and planning authorities. Although the site has approval at the state level, more recent applications shifting toward residential uses have been rejected by the council over design concerns. These setbacks highlight how mismatched planning policies can delay development.

Some developers argue that delays are not caused by a lack of intent but by difficult market conditions. With sharply increasing building costs and lengthier planning processes, many report severe financial strain in launching projects. While developers point to interest rate increases and ongoing post-pandemic uncertainty, the council is pushing back, saying that vacant and neglected sites damage community wellbeing and deter investment.

This initiative comes as Victoria faces a rise in crime and Melbourne’s CBD continues a slow recovery shaped by remote work trends. The council remains committed to revitalisation, and planning officials are expected to provide recommendations by November. These may involve changes to council laws or the imposition of higher rates or levies on under-utilised commercial land.

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