The growth of short-term stays in high-rise apartments facilitated by companies like Stayz, Airbnb and other companies is seeing permanent residents living through all-night parties, pop-up brothels and building damage caused by weekend renters.

Over the past couple of years there has been an explosion of apartments being let out for short-term stays in Melbourne's inner city and neighbouring Docklands district.

Some residents have told 7.30 that the existence of short-stay apartments has ruined their experience of living in the area, with one resident revealing that he was selling his apartment after "two years of hell" sandwiched by two apartments that were being let out for short stays.

Another, who did not wish to be named, said she had a man knock on her door looking for a "massage" when an apartment down the hall was hired by three sex workers for the weekend.

"At least 40 per cent of the apartments are investor-owned in many of the blocks," RMIT Professor of environment and planning, Michael Buxton, said.

"A lot of people have loans to pay back, so some people are making good money out of getting groups of apartment owners to act as a quasi-hotel, and it's causing a lot of problems to long-term residents who actually like living here."

Laws playing catch-up with the sharing economy

Across Australia, councils and state governments are grappling with how to deal with the new sharing economy, particularly when it comes to renting out private homes for short stays.

The rules vary widely, sometimes council by council.

"We have the situation where a short-term serviced apartment in downtown Sydney is completely unlawful, whereas a short-term serviced apartment in Docklands or the CBD of Melbourne is completely lawful as the law currently stands," said Tom Bacon, a lawyer specialising in strata buildings.

Mr Bacon represented the owners' corporation of the Watergate Building in Docklands, which last year tried to shut down a short stay business which rents out 14 apartments in the building.

The owners' corporation lost the hearing at the Victorian Civil and Administrative Tribunal, after a ruling found its 30-day minimum stay rule was legally unenforceable.

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"The responsibility of the owners' corporation is to look after the common property, not to tell you or me what we can do in our own property. That's why the rule is invalid," said Paul Salter, who operates his Docklands Executive Apartments business in the Watergate.

"I have not turned this into a hairdressing salon. It's not a hardware store. It's used as a residence and the fact that it is only used as a residence for four days, legally that is completely acceptable."

Watergate resident-manager Marshall Delves said the building employed two security guards on weekends at an annual cost of approximately $100,000 because of the short stay apartments, a cost which is borne by all the apartment owners in the building.

But Mr Salter said he paid all taxes and body corporate fees required to legally operate his business, and the employment of the security guards was unnecessary.

'This form of accommodation is here to stay'

The Watergate owners' corporation has been appealing the ruling in the Supreme Court.

In the meantime, an action group of Melbourne high-rise owners and residents, We Live Here, has been organised to try to agitate for more rights when it comes to how their buildings are used.

Mr Bacon said legislation needed to catch up with the proliferation of communities now living in high-rises.

"The old, 'my house, my castle' does not ring true in strata communities," he said.

"People should be able to use their residential units for the purposes they greatly desire, but there must also be a balance between the residents' amenity and their privacy and security, and we haven't got that balance at the moment."

Mr Bacon said he favoured an enforced 30-day minimum stay rule, as is now required in various cities across the United States in multi-storey buildings.

Mr Salter said such a rule was flying in the face of the new realities of the sharing economy.

"Airbnb is here to stay," Mr Salter said.

"Uber is here stay.

"This form of accommodation is here to stay.

"If you cannot embrace change, and you want a quiet life, then possibly what you need to do is possibly sell your property, buy a farm and move to the country."