A hilltop castle was once the most prized real estate in all the land. From the summit, the views were panoramic and the feeling of security unbeatable.

Ivanhoe Apartments sits atop one of Melbourne's peak points. At 13 storeys high, the Fender Katsalidis-designed tower will easily take in views of the Dandenong Ranges to one side and the CBD to the other.

Ensuring the height of the building matched its leafy suburban surrounds was a priority, says Fender Katsalidis director of architecture James Pearce.

"Our challenge was to say, 'Well look it's a large building, but we're not shying away from that front'," he says.

"But if it was a large beautiful, graceful, elegant building then that would be fantastic so our response was to take that challenge head on and not be embarrassed by that.

"The challenge was how do you build to a higher density in that natural surrounding and have a building that feels like it fits there and is a positive contributor to the neighbourhood instead of something looks like it was transplanted from a city development."

As well as 248 apartments, there are an additional 51 serviced apartments.

Shared spaces play a big part in any apartment tower, no matter its location. So to bring residents together, Pearce and his team designed a ground-floor garden, level one atrium with a barbecue area, pool, gym and communal lounge with its own fireplace.

Ivanhoe Apartments sits on a triangular site bordered by Bell Street and Upper Heidelberg Road, immediately opposite the Austin Hospital. Heidelberg train station and Burgundy Street strip shops are both within walking distance.

Hannah Lancman and Parv Bhullar, owners of Capeside Coffee in Heidelberg, say the area is in the midst of demographic change.

"We're finding a lot of younger patrons coming through, it's definitely having a little bit of a switch with the new apartments coming in," Lancman says.

"We're below an apartment tower, there's also one on the corner of Cartmell Street near us, there's one being constructed on Burgundy Street and there's one on Burgundy Street that's just finished.

"It's becoming quite a high density area of apartments and definitely a lot of your 20s to 30s who have just bought their first place coming in.

"Having 300 new apartments coming up in Ivanhoe is going to increase the younger crowd."

Banyule, encompassing the northern suburbs of Ivanhoe, Heidelberg and Greensborough, is experiencing a surge in apartment developments as home buyers look for options and affordability outside of the city.