Where to Stay in Melbourne: 10 Best Areas

Where to stay in Melbourne

Is Melbourne, Australia on your must-visit list? In this article, we’ll be looking at the best places to stay in Melbourne, giving you and your fellow travelers the best opportunity to fully immerse yourselves in the land down under.

When people think of Australia, the charming city of Melbourne may not immediately come to mind. Tourists love to flock to the historic sites of Sydney, experience the surfer’s paradise of the Gold Coast or snorkel the stunning coral reefs of Cairns. 

But, Melbourne, the capital city of Victoria, is a golden gem in its own right. The city has some of the best food, activities and culture that the entire continent has to offer. And, as an added bonus, taking a vacation here won’t break your wallet, making this a popular destination for couples, families and solo travelers alike.

With 4.8 million residents, Melbourne is the second-most populated city in Australia, only behind Sydney. Until 2017, Melbourne enjoyed the top spot on the Economist Intelligence Unit’s list of the “world’s most livable cities” for seven consecutive years. And, there’s no mistaking why. 

Melbourne is often referred to as the “European Enclave” of Australia for its distinctly Eurocentric feel. Because Melbourne is located on the south Australia coastline, it is the only Australian city to experience all four seasons. 

If you’re thinking of planning a trip to Melbourne, there are several key factors to consider while putting together an itinerary. The first is where to stay in Melbourne. There are no shortage of great areas to choose from, so it’s difficult to go wrong. 

This guide will help you pick the best place to stay in Melbourne while you explore the city.

10 Best Areas Where to Stay in Melbourne

1. Melbourne CBD, the best area where to stay in Melbourne

Best Areas to Stay in Melbourne

Melbourne CBD, or “central business district,” is the heart of Melbourne’s business, social and financial life. Lined with leafy trees and spacious streets, Melbourne CBD also operates a historic tram system that takes travelers all across the city. 

Melbourne CBD is a unique cross of old society and futuristic design, with historical landmarks positioned next to exclusive shopping arcades and modern office buildings. 

And, because even busy professionals need a way to relax at the end of the day, Melbourne CBD is one of the city’s best areas for clubbing and bar hopping.

The perfect way to kick off a day in Melbourne CBD is by stopping at Higher Ground, one of the district’s most popular brunch spots. Next, take a stroll down Hosier Lane, one of the most famous graffiti alleys in all of Australia. 

If you’re looking to shop around a bit, check out Bourke Street, offering both high-end and casual retail stores. End the day by people-watching in Federation Square, an open park space for live music and performance.

Melbourne CBD is the perfect place to stay in Melbourne if you want to see it all, whether you’re traveling solo or with a group. From Melbourne Airport, Melbourne CBD is easily accessible by tram, train or car.

Because it is one of the most populous areas of Melbourne, accommodation is perhaps the priciest on this list. But, the area’s popularity also offers competition for hotels and hostels, and therefore great deals for backpackers. 

You can still find great deals depending on the season, so make sure to continually check travel sites through the year.


2. South Bank, where sophistication meets culture

South Bank, where sophistication meets culture in Melbourne

If you’re an art, history or all-around culture buff, South Bank is a great place to stay in Melbourne. Here, you’ll find top-notch cultural performances, dance groups and art exhibitions from all over the world. Even the National Australian Ballet calls Southbank home. 

And, if you’re looking to broaden your horizons, South Bank offers training and educational courses on a variety of topics, in every industry. You’ll leave South Bank replenished and refreshed, and perhaps a bit more well-rounded than before.

If you’re into live music, South Bank hosts a variety of amateur or professional musicians all year-round. 

Opened in 2009, the Melbourne Recital Hall is a world-renown music hall that hosts 450 concerts annually. The attached Elisabeth Murdoch Hall is a 1000-seat auditorium with incredible acoustics and live sound.

Before catching a concert, check out the National Gallery of Victoria, Australia’s oldest and most visited art museum. The gallery has over 70,000 works which are usually all open for public viewing. 

Southbank is also home to great spots for drinking and dining, as well as playing your luck at a world-famous casino. The Crown Melbourne is a luxury casino and resort with four hotels, a premier ballroom and competitive poker. 

The summer is a great time to stay in Southbank and walk outside, boat on the Yarra river and enjoy Melbourne’s sunny skies.

Like Melbourne CBD, Southbank is close to all the major attractions of Melbourne, making the area a bit more expensive to stay in. If you’re looking for accommodation that’s a bit more low-key, there are many nearby hotels and hostels for the weary traveler.


3. Docklands, our favourite place to stay in Melbourne

Docklands, our favourite place to stay in Melbourne

The Docklands, Melbourne, is a mariner’s paradise. A modern harbor development complete with waterfront drinks, seafood dining and shiny high-rises, The Docklands has grown to headquarter many businesses and residents alike. 

The inner suburb is known for its dedication to artistic display, which includes public murals, light shows and modern sculptures and statues. The Docklands is slated to grow and develop even more in the coming years, with plans for more green space and public transportation.

Begin your day exploring the Docklands by first crossing the Webb Bridge, which connects the Docklands to the South Wharf. As you walk along the waterfront, you’ll see numerous contemporary art structures representing a variety of themes, often highlighting key parts of Australia’s history. 

You can also spend a day perusing the District Docklands, a half-indoor-half-outdoor shopping mall comprising 80 stores and two levels. 

But, the Docklands is perhaps most famous for its colorful Melbourne Star Observation Wheel, a grand ferris wheel looking over the entire city of Melbourne. With seven luminous spokes meant to represent the seven-pointed star of the Australian flag, the Star is a great activity for adults and kids alike. 

Once nightfall hits, put on your dancing shoes and head to Alumbra, a nightclub to rival that of New York City or Ibiza with great dancing and drinks.

Like Melbourne CBD & Southbank, the Docklands is in a very central part of Melbourne, making it a pricier place to stay. But there are several low-cost hostels available for backpackers, and some even include complimentary WiFi, coffee and breakfast.


4. East Melbourne, upscale vibes with outdoor fun

East Melbourne, upscale vibes with outdoor fun

Tucked discreetly behind the major parklands and sporting arenas of downtown Melbourne is a glamorous and highly affluent area known as East Melbourne.

 Known for its rich history, upscale cafes and sprawling green spaces, you’ll find many families with young kids who call East Melbourne home. It’s the perfect place to stay in Melbourne, whether for a few weeks or an extended amount of time.

Take a short walk down the tree-lined streets and see stately, 19th-century Victorian homes and terraces tower above the street. You’ll also see many “art-deco” style homes, including the famous “Dorijo” apartment with three cascading balconies. 

As one of the oldest suburbs in Melbourne (it was first planned in 1837), East Melbourne is still home to many religious and government institutions. The Parliament of Victoria and offices of the Government of Victoria are both located on Spring Street, near charming, European-style eateries. 

Melbourne’s Parliament House can be toured on certain locations throughout the year, but tickets should be booked ahead of time for the best availability.

East Melbourne is also home to leafy parks and open spaces, including the world-famous Fitzroy Gardens. Included in 64 acres of land is a lake, conservatory and hundreds of native trees, perfect for young kids to explore and for couples to walk around. 

But, East Melbourne is perhaps most well-known for its renown Melbourne Cricket Ground (MCG). MCG is the largest stadium in the southern hemisphere and has hosted an Olympic World Games and two Cricket World Cups. 

The stadium is considered a shining landmark of Melbourne, and was listed as a national heritage site in Australia in 2005.

East Melbourne is serviced by major tramlines that connect the suburb to Melbourne CBD, making it easily accessible throughout the day. 

As this area is fairly close to central Melbourne, accommodation usually peaks at around or over $100 a night. But, great deals pop up regularly here, so be sure to check in often.


5. Carlton, “Little Italy” meets college town

Carlton: The "Little Italy" to stay in Melbourne

Carlton is an exciting hotspot packed with incredible restaurants, lively nightlife and no shortage of fun activities to do, all neighboring adjacent Melbourne CBD. If you’re looking to stay out until dawn, dancing the night away with great friends and even better cocktails, Carlton is the place for you.

Carlton is home to the renown University of Melbourne, and Carlton’s streets are always full of students walking to class or sipping a post-study cup of coffee at a café on Elgin Street. 

In fact, because the University of Melbourne is also close to the CBD Campus of RMIT University and the Fitzroy campus of Australian Catholic University, thousands of students call Carlton home. 

Because of this, several bars and nightclubs have popped up all around the area, making it impossible to choose just one one on a night out.

For added sightseeing, fill up your plate at any one of the famous pizzerias and Italian eateries on Lygon Street, Melbourne’s own “Little Italy.” There are year-round festivals and tastings on Lygon Street, so be sure to come on an empty stomach. 

Carlton is also known for The Royal Exhibition Building, a stately 19th century pavilion that has garnered World Heritage recognition, despite it being man-made. Once you’re finished touring one of the many exhibitions, take a stroll through the incredible Carlton Gardens

With classic Victorian landscaping, sweeping Australian tree plantings and three historical fountains, you’ll be in awe of this nationally-recognized spot.

Carlton is also one of the most diverse suburbs in Melbourne and you’ll find residents and tourists alike from all walks of life.

Because Carlton is home to many international students, graduates and professors, housing (and accommodation) is usually on the less expensive side. Hostels are popular here, but you’ll also find hotels at decent prices.


6. Fitzroy, where to stay in Melbourne for nightlife

Fitzroy, where to stay in Melbourne for nightlife

Just like Carlton, Fitzroy has a reputation for the spectacular. Some say Fitzroy is the “coolest” suburb in Melbourne, with its artsy bars, eclectic dining venues and independent clothing stores all within walking distance. 

Street art covers narrow alleyways next to old buildings and residential homes. With all its modern flairs, you may never guess that Fitzroy is actually Melbourne’s oldest suburb. But, Fitzroy is home to young students, older retirees and families alike.

Second-hand shopping is a beloved pastime in Fitzroy, with eager shoppers packing Brunswick Street to find the best deals. 

Popular vintage store Hunter Gatherer is an institution, selling affordable clothing for over a decade. It’s a stark contrast to the upscale boutiques of nearby Gertrude Street, where many stores sell stylish design and homeware pieces. 

After a long day of walking, you may be in mind for a drink. And, Fitzroy won’t disappoint. You can drink in an old distillery or even watch the sun set on a classic rooftop bar. 

If you’re visiting on a weekend, you’ll definitely want to check out Fitzroy Mills, which transforms from an unassuming carpark to a vibrant farmer’s market with fresh produce and local goods.

It is a very walkable city, and you can hit many hotspots in a matter of minutes. To get to Fitzroy from Melbourne CBD, you can take a bus, train or tram, and you may even run into a celebrity or two.

Ever the stylish and youthful area, Fitzroy hotels and hostels offer luxury accommodations at a very fair price


7. Collingwood, a proud history and an eclectic music scene

Collingwood, a proud history and an eclectic music scene

Situated in Melbourne’s inner northeast, Collingwood is famous to both locals and world travelers alike. Now known for its “hipster” population and cutting-edge galleries, Collingwood wasn’t always the artsy haven it is today. 

The suburb has a proud history of gritty, blue-collar origin, and used to be an industrial city. Now, old warehouses and worker’s quarters have been converted to modern galleries, eateries and hubs of multicultural activity.

Music dominates Collingwood’s social scene and you can attend a live concert or performance almost any night of the week. 

Tote Hotel on 71 Johnson Street is a popular spot with local and touring punk, indie and psychedelic bands, who play pounding music until dawn. Smith Street is an art buff’s haven, with large public murals and diverse street art plastered over the walls of 19th-century buildings. 

Here you’ll also find microbreweries serving up local favorites, contemporary coffee shops and cozy bookstores to explore for an hour or two. While perusing, you may even find a rare antique item at one of many vintage stores, as well as high-priced goods from traditional retailers. 

Collingwood is also well-known for its diverse culture and cuisine. Whatever you fancy, you’ll be sure to find a world-class dining experience in this area.

Collingwood is very LGTBQ+ friendly, with several gay bars throughout the suburb. Because of the dominant nightlife scene, couples without kids may find Collingwood a welcome escape.


8. St. Kilda, beachside glamour meets old-world glitz

St. Kilda, beachside glamour meets old-world glitz

Beautiful, breezy and beachside are three words that describe the lively suburb of St. Kilda. Here you’ll find vacationers of all kind: young backpackers exploring the streets, surf enthusiasts catching the waves and kids of all ages. 

But, just like Collingwood, St. Kilda wasn’t always such a happening place. In the Victorian era, St. Kilda was a premiere location for Melbourne’s elite, and many 19th-century mansions and stately terrace houses still exist today. 

Post-war, St. Kilda became a gritty haven for artists, migrants, bohemians and rough-and-tumble entertainment. Though the area has changed significantly, the old St. Kilda soul and pride still remains, seen in its residents and old glamour.

Just six kilometers away from Melbourne CBD, a visit to St. Kilda is an easy day trip or a great extended stay. 

St. Kilda beach is a popular swimming spot, but tourists may really come for a oceanside walk along the Esplanade. Here you’ll find cyclists, joggers and rollerblades moving along with a stunning view of zooming yachts in the distance. 

As you move towards Acland Street, you’ll find fine-dining establishments, quality coffee and even an old European bake shop or two with mouth-watering pastries.

But, St. Kilda is perhaps best-known for its world-famous attraction: Luna Park. Luna Park sits on the foreshore of Port Phillip Bay and is marked by an awe-inspiring smiling face at the entrance. 

Though modernized with new features, Luna Park has been around since 1912. With over 20 rides, including the largest carousel in the southern hemisphere, it’s assured you won’t get bored. 

Though open year-round, it’s advised to hit Luna Park in the summer, when the park really comes to life with outdoor light displays and festivals.

St. Kilda is especially popular with young tourists and is extremely LGBTQ+ friendly. Like Collingwood, St. Kilda has a lively pub and music venue nightlight scene which may not be as child-friendly. 

But, accommodation here is relatively inexpensive and most hotels are within walking distance of all the major attractions.


9. Footscray, a diverse mixture of culture and fun

Footscray: culture and fun to stay in Melbourne

Widely considered to be a melting pot of culture, cuisine and ideologies, Footscray is an exciting suburb with a unique history all its own. Once a home for Eastern-European settlers, the area is now a hub for Vietnamese, Chinese and East African migrants. 

This mesh of cultures has led the area to be deemed as “one of the coolest neighborhoods” to stay in Melbourne for its diversity and high energy.

About a 20-minute drive from Melbourne CBD, Footscray is very easily accessible. And, be sure to come hungry. With the best cuisine from Ethiopia, Vietnam, Hong Kong, India and more, you’ll be sure to find something you like. 

Start by checking out the Footscray Market, your one-stop-shop for all things exotic. Here you’ll find rare and aromatic spices as well as international dishes ready-to-serve. 

Little Saigon Market offers traditional Vietnamese fruits and vegetables and other staples hard to find anywhere else. The Highpoint Shopping centre is another popular spot, with 500 specialty stores to peek around in. 

Footscray also has a very distinct arts scene, led in part by the Footscray Community Arts Centre. The Centre regularly puts on local performances and exhibitions, drawing crowds from all over Melbourne.

End your day by taking a stroll through Footscray Park, one of the largest Edwardian parks in all of Australia. Here you’ll find ornate ponds, flourishing palms and great benches for people watching, as well as the Victorian Heritage Register. 

Footscray Park is also home to the newly annual St Jerome’s Laneway Festival, which hosts live music, performances and local acts.

The cost of living in Footscray is significantly lower than central Melbourne, making the hotels and hostels much more inexpensive than its counterparts. Footscray is a very safe area, making it a suitable option for families and solo travelers alike.


10. South Yarra, where to stay in Melbourne for upscale 

South Yarra, where to stay in Melbourne for upscale

As one of the oldest suburbs in Melbourne, nothing says hustle and bustle like the suburb of South Yarra. Parents love the expansive parks and gardens, and young professionals equally love the high-energy bars and clubs

Once a retreat for the wealthy in the 1840s, South Yarra still retains some of its upscale qualities while also offering fun activities at a low cost, if you know where to look. 

And, with stunning views of the Yarra River, South Yarra is one suburb that can’t be missed.

South Yarra is a retail-destination, with bright and shiny shop lights peeking out from every corner. Though the area tends to skew on the pricier side, you’ll still find some quirky shops just waiting to be explored. 

The Como House is another popular attraction, one of Melbourne’s most glamorous and stately 19th-century homes. You can book a tour to see both the house and the surrounding gardens while learning about the history of the Armytage family. 

Prahran Market has also become a foodie’s haven in the past few year’s, selling a diverse range of fresh seafood, specialty meats and cheeses and seasonal produce. 

Ending a day in South Yarra is best enjoyed with a walk down Toorak Road and Chapel Street, where you’ll find eclectic cocktail lounges, the ever-popular Jam Entertainment complex and stylish restaurants and bistros.

Just a 15-minute drive from Melbourne CBD, South Yarra is a very central spot. 

While South Yarra is a fairly affluent area, there are still moderately-priced accommodation spots all around the suburb. This area is fairly residential, so you may also find a good range of AirBnBs to choose from.

Wherever you decide to stay in Melbourne, you can’t go wrong by choosing a spot on this list. Each suburb has its own unique flair and personality, and the only challenge you may find is deciding where to stay. 

When planning your trip to Melbourne, it’s best to plan early and book activities, like tours and reservations, in advance. This ensures you’ll beat the lines and any higher prices that come with booking last-minute. 


Photo: Shutterstock/(7)(8) Flickr

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