Apartment developers have snared another prominent estate in the heart of Melbourne's blue-ribbon belt.

Opposite Stonington, the former government house, 401 Glenferrie Road was marketed just two years ago as "the finest residence in Malvern".

It may now be the next historic home in the exclusive precinct to fall if a proposed medium density complex with more than ten units, applied for in March, is approved.

For years known as "the pink house of Glenferrie Road" because of the pastel hue former owners painted it for decades – the 2155-square-metre holding was last sold in 2015 by retired tennis star Paul McNamee for $7.8 million.

Homes over the back fence are zoned Toorak, a suburb continuing to lose historic mansions and gardens to apartment and townhouse complexes this year.

Not far from 401 Glenferrie Road, developers have just finished razing Aberfeldie at 14 Lascelles Avenue and 705 Orrong Road, a property marketed in 2014 as "one of Toorak's last grand estates".

The parcel is now earmarked for a luxury complex with 42 dwellings, the cheapest which agency Marshall White recently listed for $1.1 million.

Earlier this year, a developer linked with 401 Glenferrie Road, took control of two adjoining Toorak historic homes at 1093-1095 and 1097-1099 Malvern Road, properties also now mooted to make way for flats.

RT Edgar's Mark Wridgway who was behind the Malvern Road sales.

Agents say the sites are making way for stock to feed a growing demand from cashed up downsizers who want to stay in the area.

These "downsized" dwellings, which can still command a high price, are just papers and contracts at the moment for some lucky developers.

In Orrong Road, Toorak, a proposed 20-dwelling complex, contains penthouses worth $6.5 million. The sale of two of these proposed dwellings would almost cover the speculated $15 million the builder recently paid for the land, which was for years the garden of another home.