Manhunt continues over Melbourne death

A man wanted by police after another man was killed at a Melbourne halfway house is still at large.

Police discovered the body of a 45-year-old man in a St Kilda apartment block early on Monday after neighbours reported an altercation between two men.

The man, who lived alone at The Regal, sustained fatal injuries during the attack.

Police would not comment on the type of weapon used, but it's believed he was cut by a sharp object.

They later said 29-year-old Earl Jones could assist their investigation and urged him to hand himself in.

Neighbours say there is often a heavy police presence in the laneway which is frequented by drug users and sex workers.

"It's pretty bad at night," a local man told AAP.

The Regal is a community-managed rooming house run by the Port Phillip Housing Association.