Peter Mylonas is planning to build a residential apartment block with ground-floor retail on the former Caltex service station site in Clinton Street.

The development, which could range from four to eight storeys, might depend on a building height variation. It would also add to apartment stocks constructed in and around Clinton Street in recent years.

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Mr Mylonas believes the time is ripe.

Opposite the site, he's sold eight apartments in the Quest development, owned by Nicholas Daoud. Two bedroom units are selling for $500,000 and one-bedroom - $400,000. Another 17 are yet to sell.

"It's a different quality of business people buying them," he said.

"Most are from Goulburn but we are starting to get inquiry from Canberra, so it's breaking new territory. Some want to live there while others are investors.

"It motivated me because I saw the potential. The city is changing."

Mr Mylonas bought the 4190 square metre decontaminated site last November, following an expression of interest process.

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Since then he's been pondering his options and has batted away offers from tyre outfits and a Sydney agent wanting property for a Spotlight store.

He's engaged a Canberra architect to draft plans for some 50 three to four-bedroom apartments with a penthouse on top.

"I believe the council wants to make a statement as you come into (the CBD)," Mr Mylonas said.

"I'm imagining something similar to Quest, We are finding that people want something a little bit bigger, so we'll give them a variety."

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The B4 mixed use zone also allows retail/commercial on the ground floor and residential and offices above.

Pre-lodgement talks with council planners have already taken place.

Architects are aiming for a design that fits in with the heritage precinct, which includes the former Our Lady of Mercy convent and chapel opposite and Sts Peter and Paul's Old Cathedral on Bourke Street.

"It needs to bring a pride and joy to the city," Mr Mylonas said.

He plans to start the estimated $6 million project soon after DA approval.

The council's Urban and Fringe Housing Strategy is forecasting a rise in inner city living as retirees look for easy access to the CBD.

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Meantime, My Mylonas says the real estate market is experiencing mixed fortunes. Residential is slowing, possibly due to an over-supply and tighter bank lending.

But demand for industrial land is surging on the back of attractive prices. Mr Mylonas said Goulburn's average $130/square metre price was vastly better than Campbelltown's $600 to $1000/sqm or Wollongong's $350/sqm.

An investor has recently purchased a 32 hectare site just off the Hume Highway at Murrays Flat and is about to exchange on an adjoining block of the same size.

He has also purchased land in Marulan and a portion of a Highland Way block, where an Islamic Cemetery was refused consent.

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Mr Mylonas said a Chinese investor was seeking property for a solar farm. A Melbourne party wanted land for a chicken farm.

"The trend at the moment is that people with money are looking for opportunities and are (eyeing off) Goulburn. They don't have to rely on banks and we are getting this inquiry on a regular basis," he said.

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