Building approvals data shows City of Melbourne apartment projects made up just half of all approvals for the inner Melbourne area over the past 12 months, down from nearly three-quarters the previous year.

The shift was attributed to fewer available development sites in the city's core and a focus on owner-occupier buyers who prefer living outside the city centre, JLL's residential research head Carol Hodgson said.

Ms Hodgson said JLL estimates about 21,170 apartments were under construction across inner Melbourne. An additional 16,707 apartments were actively being marketed for completion over the next five years, she said.

There were signs Melbourne was more attractive for apartment investors than Sydney, CBRE's Mark Wizel said.

The city's rental market increased 1.7 per cent over the last year whereas Sydney's rose by 0.4 per cent and Melbourne's median house price was significantly lower than Sydney's making it more accessible to wider pool of investors, he said.

The apartment boom has prompted concerns of oversupply which, along with recent curbs on lending to foreigners by Australia's banks and new stamp duties on offshore investors, has raised the possibility of buyers failing to make good on their purchases.

JCP Investment Partners has joined a growing list voicing concern.

In its latest quarterly outlook, the investment adviser said tightening credit standards would inevitably lead to greater settlement risk particularly in the oversupplied market along Australia's eastern seaboard.

"Recent proprietary meetings with some apartment developers suggest that up to half their settlements are at risk in the next three months," JCP's research note said.

Developers were blaming the banks' new foreign income rule changes for the emerging financial problem, it said.

Ms Hodgson said the apartment surge, forecast to peak in 2017-18, might not be as big as expected because it would rely on getting pre-sales and planning approvals.

"Given these hurdles, JLL believes many of these potential projects are unlikely to complete this market cycle," she said.

Foreign Investment Review Board figures suggest an unprecedented $25.5 billion of offshore money was invested in Victorian residential real estate in 2015.

A recent Charter Keck analysis of FIRB's data concludes current apartment settlements were less exposed to international purchasers than those in coming financial years, particularly 2017 and 2018.

Melbourne has not yet seen signs of buyers failing to settle but if it does, there was "potential contagion risks to other parts of the property market", JCP said.