A group of eight neighbours in the Melbourne bayside suburb of Cheltenham have banded together to sell their properties as a 4,700-square-metre "megalot" for more than $9 million.

Despite being midway through renovations on their first home, Glenn Mison and partner Toni Howarth came up with the idea when rezoning in their area to allow three levels in height.

"It took me about a month or two to get everyone to agree with a lot of conversations and emails and text messages," said Mr Mison.

Megalots have been increasing since 2014, when zoning changed in parts of Victoria and New South Wales to allow higher density living and infrastructure projects such as train stations and hospitals.

"It's a bit of test of the market. There's uses like aged care or high density townhouse style that might be suited to this site," said Savills real estate agent Julian Heatherich.

Mr Heatherich said selling as a group usually results in an uplift in value of 20 to 60 per cent.

"Since the rezones have come in through Victoria we've put about 120 properties like this to the market, consisting maybe of around 20 to 25 sites," he said.

Group of more than 60 bands together in Sydney

Eight properties is a record for Melbourne, but in Sydney, with prices soaring, a number of large groups have banded together.

A group of 62 owners in Frenchs Forest currently have their combined site near a new hospital on the market for $200 million, which would reap more than $3 million each.

In Castle Hill, 25 neighbours near the new north-west rail link are hoping for over $100 million.

Getting neighbours to agree to sell at one time is challenging - with how to divide up the potential spoils a divisive issue.

The most popular way is to divide the money as a proportion of land area, since it is being sold to a developer.

However, that can upset any residents who have spent money improving or renovating their properties.

Glenn Mison and his neighbours have gone down another route.

"Even though there's a few different block sizes and all that we're basically getting the money if it goes through and dividing it by eight - the number of properties and that's it. Really it's the only fair way to do it," he said.

BIS Shrapnel property analyst Angie Zigomanis said the megalot sales will continue to increase in number.

"As house price values get higher, and underlying land values get higher as well, it becomes increasingly important for people to aggregate those values," he said.

With expressions of interest closing this week, Glenn Mison and Toni Howarth hope their mega bet will pay off.

You can watch Emily Stewart's story today on The Business at 4:30pm and 8:30pm (AEST) on News 24 and 11:00pm (your local time) on ABC.