Bourke Street, C.1880
The 1880s saw extraordinary growth: consumer confidence, easy access to credit, and steep increases in land prices led to an enormous amount of construction. During this "land boom", Melbourne reputedly became the richest city in the world and the second-largest (after London) in the British Empire.
The decade began with the Melbourne International Exhibition in 1880, held in the large purpose-built Exhibition Building. A telephone exchange was established that year, and the foundations of St Paul's were laid. In 1881, electric light was installed in the Eastern Market, and a generating station capable of supplying 2,000 incandescent lamps was in operation by 1882. The Melbourne cable tramway system opened in 1885 and became one of the world's most extensive systems by 1890.
In 1885, visiting English journalist George Augustus Henry Sala coined the phrase "Marvellous Melbourne", which stuck long into the twentieth century and has come to refer to the opulence and energy of the 1880s, during which time large commercial buildings, grand hotels, banks, coffee palaces, terrace housing and palatial mansions proliferated in the city. The establishment of a hydraulic facility in 1887 allowed for the local manufacture of elevators, resulting in the first construction of high-rise buildings[ such as the 12-story APA Building, among the world's tallest commercial buildings upon completion in 1889.
This period also saw the expansion of a major radial rail-based transport network.