Strict new planning rules designed to curb breakneck development in Melbourne's CBD could serve as a major deterrent to foreign investors, severely undermining the Victorian capital's ability to compete on an international playing field.

While prominent members of the property and architecture sectors have lauded the overall direction of the Andrews government’s latest batch of planning laws, some say the plot ratio restrictions in tandem with increased stamp duty for overseas buyers will severe diminish Melbourne’s lustre in the eyes of foreign capital. “I think that from a big…