Despite concerns about oversupply in Melbourne's CBD residential market and tepid rents, Australia 108 has enjoyed flourishing sales even prior to launch.

A new development which is slated to be Melbourne’s tallest building upon completion has reportedly secured over 300 sales during the pre-launch period.

At the launch event for Southbank development Australia 108, CBRE Melbourne residential projects managing director Andrew Leoncelli said that sales for the project have already proven extremely successful.

“This is the most exciting release of an apartment project in Melbourne’s history,” said Leocelli at the opening of a display suite set situated just opposite the project site. “To break the back of the sales is a very proud achievement.”

The Herald Sun subsequently reported rumours that over 300 sales for Australia 108 have already been secured. Buyers have reportedly grabbed grabbed as many as 90 of the 165 three-bedroom penthouses and sub-penthouses situated above level 72, with Leoncelli claiming that at least $1 billion in revenue will be generated.

The development at 70 Southbank Boulevard is set to be the tallest building on the Melbourne skyline upon completion, standing a total of 319 metres in height, or 25 metres higher than the city’s current tallest building, the adjacent Eureka Tower.

The project is part of the ongoing expansion of residential property in Melbourne’s inner-city, catering to the higher end of the market with a total of 1,105 apartments. Apartments situated between the first habitual floor at level 14 and the 68th floor valued at between $450,000 to $950,00, while the starting price for those between the 72nd and 99th floors is pegged at $1.5 million.

The success of pre-launch arrives despite widespread concerns that Melbourne’s downtown residential market is suffering from a glut of property developments, leading to rising vacancies and stymieing gains in values and rental levels.

The recently ousted Napthine government in Victoria created a glut of residential projects by making it far easier for Melbourne developers to negotiate the approvals process.

The approvals it issued during its tenure in office will continue to translate into new developments over the next several years, meaning that more apartments will be built in Melbourne as compared to Sydney relative to market size. Data from the City of Melbourne already indicates that it’s already host to a record-high level of units under construction, with most of the development driven by overseas investors.

The upshot of this is expected be weaker rental growth as well as increased vacancies relative in the Victorian capital, where members of the property sector have been complaining since the middle of last year about a gross oversupply of new apartments.

Average Monthly Rent for Inner City Apartments

These concerns are vindicated by data from Numbeo, which indicate that rental levels for inner city one bedroom and three bedroom apartments continue to lag behind those of other major cities in Australia, including Sydney, Brisbane and Perth.