More skyscrapers could spring up in the Melbourne CBD with planning minister Richard Wynne looking to change strict planning controls that have seen new apartment and office development faltering over the past two years.

Only three new towers — one high-rise apartment block and two offices — have been approved for the city centre since the government introduced the controversial rules in 2016.

The provisions limit the height of new buildings by restricting the ratio of total floor area in the building compared to the size of the site, and also require high-rise builds to be set back from the street.

Mr Wynne revealed he had made the decision after peak industry bodies, including the Property Council of Australia, raised their concerns.

Before the November election, the Property Council commissioned a report into planning control C270 and the effect it had on the growth of the CBD. It revealed only three buildings, including one apartment tower, had been approved for development since 2016.

“We’re committed to having a continuing conversation with the peak bodies about C270 and do we need to perhaps tweak it a little bit,” Mr Wynne told Domain.

“We have to ensure that the CBD continues to thrive. We work obviously closely with the city of Melbourne and the Lord Mayor so the answer is that’s a live issue.”

More flexibility in the planning rules would be only one piece of the puzzle in allowing new residential towers to go ahead, as bank credit squeezes and taxes on foreign buyers are also weighing on the market.

A string of CBD sites slated for residential development have recently been repurposed for more attractive office projects by local giants such as Mirvac, Cbus Property and Charter Hall, while other sites are being turned into hotels or student accommodation.

Changing buyer interest has also been slowing the development of new apartments, Mr Wynne acknowledged.

“There has been a shift away from the CBD to smaller developments. A classic example is around the North Melbourne station; around there they are building 40-50 units at four to five levels and they’re selling like there’s no tomorrow,” he said.

The change to the C270 controls is an immediate focus for Mr Wynne, who returned as planning minister in late November following Labor’s landslide election win.

Despite a tough election campaign in his own electorate of Richmond, Mr Wynne said he was ready for the next four years.

While finalising plans for development of Fishermans Bend was his biggest challenge over the past term, Mr Wynne said Melbourne’s booming population growth would be one of his main focuses moving forward.

“Our government is unambiguously for growth,” he said. “The best way we can articulate that is that we want to ensure growth is shared across the state.

“Clearly we have a unique opportunity now because of the population that’s coming into Melbourne. We need to stay up to speed with the infrastructure investment but also to ensure that we have enough housing for people.”

Success stories in Geelong, Ballarat and Bendigo, where the private sector was moving because government job hubs were being set up, meant some of the extra housing needed would be provided by private developers.

“Even some of the secondary cities behind them – Shepparton, Albury-Wodonga – are doing very well so you see that there is this move of people who are looking at the opportunities for both quality housing [and] jobs,” Mr Wynne said.

In metropolitan Melbourne, the volume of new housing lots announced was set to fall just below the 100,000 promised to be released by the end of 2018.

“We’ll just be shy of it by the end of the year. It will be 98,000 lots in the growth corridors. We will get them out before the end of the calendar year,” Mr Wynne said.

Continued land supply, he said, was key to keeping housing affordable in wider Melbourne.

“Because it creates the competitive tensions right across all of the growth corridors to ensure that developers are providing a quality product and an affordable product as well,” Mr Wynne said.

He said he was looking forward to the next four years with planning and his new portfolios of housing and multicultural affairs, despite the tough criticism he had faced in the past four years.

“You’ve always got competing demands. My job is to try and find a balanced response. Do you get it right all the time? No. But if your motivation is trying to do things in the public interest then I’d argue that’s a good motivation,” he said.