Where to Stay in Melbourne: Best Areas & Hotels

Melbourne is the capital of Victoria and also one of Australia’s most populous urban centers. Located on the shores of Port Phillip Bay, the city is famous for its creativity, food culture, and sports. If you’re looking for the best areas to stay in Melbourne, this guide will help you choose the right neighborhood.

Known to the Wurundjeri people as Naarm, the city expanded during the gold rush of the 1850s. Melbourne’s past is clearly visible in its grand Victorian architecture and historic landmarks. As one of the most popular destinations in Australia, Melbourne is also home to a wide spectrum of accommodation, ranging from luxury hotels in the central business district to apartments and budget stays across its inner suburbs.

Melbourne offers countless attractions that showcase its character. These include sights such as the National Gallery of Victoria, which houses an impressive art collection, the Royal Botanic Gardens, a popular green space, and the Melbourne Museum, which offers insight into Australian history and culture.

Beyond Melbourne’s must-see attractions, the city’s atmosphere is further shaped by its laneways filled with street art and cafés, its reputation as one of the world’s coffee capitals, and a comprehensive tram network that makes exploring the city straightforward. Each neighborhood has its own identity, from the historic charm of St Kilda to the trendy streets of Fitzroy and Collingwood.

So, keep reading to discover the best areas to stay in Melbourne. We’ll guide you through the neighborhoods that define the city and help you find the right place for your trip.

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What’s the best area to stay in Melbourne, Australia?

The CBD (Central Business District) is the best area to stay in Melbourne, especially for first-time visitors. This central district is where you’ll find landmarks such as Federation Square, Flinders Street Station, and many of the city’s top attractions within walking distance. The CBD also offers everything from high-end hotels with skyline views to budget-friendly stays and serviced apartments. Its location and extensive tram network make exploring the rest of the city easy.

Find available accommodation in Melbourne CBD.

Best Hotels in Melbourne CBD

• Best 5-star hotel: The Ritz-Carlton, Melbourne
• Best 4-star hotel: Hotel Indigo Melbourne on Flinders by IHG
• Best 3-star hotel: ibis Melbourne Central
• Best budget hotel: Miami Hotel Melbourne
• Best hostel: Little Drifter Melbourne

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Where to Stay in Melbourne: Top 10 Locations for a Perfect Visit

While we recommend the CBD as the best location for sightseeing, it’s not the only option worth considering. Each part of the city has its own character, attractions, and reasons to stay. Depending on whether you’re interested in nightlife, culture, or beaches, Melbourne has a neighborhood to match.

• Melbourne CBD is the city’s core, perfect for first-time visitors. Landmarks such as Federation Square, Flinders Street Station, and the Yarra River are all within walking distance. In addition, the free tram zone makes it easy to move around.
• Fitzroy is known for its street art, independent shops, and live music venues. Brunswick Street is packed with bars and cafés, making it a strong choice for alternative nightlife.
• Collingwood lies just east of Fitzroy and is also known for its LGBTQ+ scene, live music venues, independent breweries, and Smith Street.
• St Kilda brings a beachside setting only a short tram ride from the center. It’s home to Luna Park, a busy promenade, and plenty of restaurants and bars along Acland Street.
• Docklands is a modern waterfront precinct known for its contemporary apartments, Marvel Stadium, and harborside dining.
• Southbank, across the river from the CBD, is known for its high-rise hotels, Crown Casino complex, and riverside dining. It also houses the Arts Centre Melbourne and the National Gallery of Victoria.
• Carlton is the city’s Italian quarter, famous for Lygon Street’s cafés and restaurants. The University of Melbourne and the Melbourne Museum are also located here.
• South Yarra is an upscale area with boutiques, cafés, and nightlife along Chapel Street. It’s convenient for shopping and dining.
• Prahran is known for its nightlife, vintage stores, and food markets.
• Richmond is primarily known for the Melbourne Cricket Ground and also for Victoria Street’s Vietnamese restaurants.

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The Ultimate Guide to the Best Areas to Stay in Melbourne

Melbourne CBD is the best area to stay for first-time visitors. It concentrates many of the city’s main attractions and transport links.

Why is this the best area to stay in Melbourne:
• Free Tram Zone
• Federation Square
• Flinders Street Station
• Laneway cafés
• Street art
• Shopping at Bourke Street Mall
• Access to public transport
• Queen Victoria Market
• Museums and galleries

The Central Business District, or CBD, stretches along the northern bank of the Yarra River and forms Melbourne’s commercial and cultural core. Its grid of streets, designed in the 1830s by surveyor Robert Hoddle, is easy to navigate and remains the city’s most important hub for business, shopping, and tourism.

Staying in the CBD places you near many of Melbourne’s most famous landmarks. Highlights include sights such as Federation Square, which opened in 2002, and is a striking cultural precinct that houses the Ian Potter Centre and the Australian Centre for the Moving Image. Meanwhile, the nearby Flinders Street Station dates back to 1910 and is one of the city’s most recognizable symbols. In addition, the Yarra River’s Southbank promenade is a short walk away, and the historic Queen Victoria Market, established in 1878, lies on the district’s northern edge.

Beyond attractions, the CBD is known for its laneways—narrow passages filled with cafés, street art, and small bars. For example, Hosier Lane is best known for murals. At the same time, Degraves Street and Centre Place are lined with coffee shops and restaurants that reflect Melbourne’s reputation as a global coffee capital. Additionally, Collins Street, nicknamed the “Paris End,” is home to luxury boutiques and heritage buildings from the late 19th century.

The CBD is also the heart of Melbourne’s theater scene, with venues such as the Princess Theatre, Regent Theatre, and Her Majesty’s Theatre hosting international productions. Sports fans can walk or take a short tram ride to the Melbourne Cricket Ground or Rod Laver Arena, where the Australian Open is held every January.

As expected, local connections are excellent. The CBD is covered by a Free Tram Zone, which allows passengers to travel at no cost within the district. Additionally, Southern Cross and Flinders Street stations offer commuter and regional links, and SkyBus services from Southern Cross connect directly to Melbourne Airport.

Accommodation in the CBD ranges from five-star hotels in high-rise towers with panoramic views to serviced apartments and mid-range options specially aimed at business travelers. While budget stays are more common in nearby districts, a handful of hostels and smaller hotels can also be found here.

Best Hotels in Melbourne CBD

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Carlton combines cultural sightseeing and Italian dining.

Why is this the best area to stay in Melbourne:
• Lygon Street
• Italian restaurants
• University of Melbourne
• Melbourne Museum
• Royal Exhibition Building
• Carlton Gardens
• Cinema Nova
• Bookshops

Carlton is located just north of the Central Business District. It is an excellent option if you want to stay close to the city center while enjoying Italian dining, cultural landmarks, and the energy of a student neighborhood.

The neighborhood began to develop in the 1850s during Melbourne’s post–gold rush expansion. During this time, many of the district’s Victorian terraces were built, giving it a distinctive architectural style. Later, after World War II, Italian migration left a permanent mark on the district.

The heart of Melbourne’s “Little Italy” beats on Lygon Street, a thoroughfare lined with trattorias, cafés, and dessert shops.  

Carlton is also home to several of the city’s top attractions, most of which are clustered within the landscaped Carlton Gardens. This 19th‑century park is home to tree‑lined avenues, ornamental flowerbeds, fountains, and, importantly, to the Royal Exhibition Building. Completed in 1880 to host international fairs, it is now recognized as a UNESCO World Heritage Site. Meanwhile, the nearby Melbourne Museum houses extensive galleries on natural history, Indigenous cultures, and science.

Carlton is also a pedestrian-friendly and well-connected part of Melbourne. Many tram routes link the district directly to the CBD and other suburbs. When it comes to accommodation, Carlton offers boutique hotels, serviced apartments, and short-term rentals.

Best Hotels in Carlton, Melbourne

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Fitzroy is one of the best areas to stay in Melbourne to experience the city’s alternative culture, creative scene, and nightlife.

Why is this the best area to stay in Melbourne:
• Brunswick Street
• Smith Street
• Vintage shops
• Indie cafés
• Street art
• LGBTQ+ friendly venues
• Live music
• Craft beer bars
• Art galleries
• Eclectic restaurants
• Bohemian vibe

Fitzroy lies just north of the CBD and is one of Melbourne’s oldest suburbs, established in the 1830s. The area has long been known for its working-class roots and later became a hub for artists, musicians, and counterculture. Today, it is widely considered the city’s creative heart and offers a lively mix of nightlife, food, and cultural attractions.

The neighborhood is especially famous for Brunswick Street, a strip lined with pubs, bars, cafés, and vintage shops. Nearby, Gertrude Street has become a destination for art galleries, dining, and boutique shopping, while Smith Street is home to many LGBTQ+ nightlife venues.

Street art also plays a central role here. Murals and graffiti cover walls throughout the district, with places such as Rose Street and the surrounding laneways showcasing ever-changing displays. In addition, the Rose Street Artists’ Market hosts local makers and artists every weekend.

When it comes to connections, public transport consists of several tram lines running along Victoria Parade and Smith Street and linking Fitzroy directly to the CBD. Additionally, the area is walkable, with most attractions clustered close together.

Accommodation in Fitzroy ranges from small boutique hotels to short-term rental apartments and a few guesthouses.

Best Hotels in Fitzroy, Melbourne

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Collingwood is one of the best areas to stay in Melbourne for nightlife, alternative culture, and LGBTQ+ travelers.

Why is this the best area to stay in Melbourne:
• Smith Street
• LGBTQ+ friendly bars
• Art galleries
• Warehouse cafés
• Street murals
• Trendy restaurants
• Craft breweries
• Vintage stores
• Local designer boutiques

Collingwood sits directly east of Fitzroy and shares much of its creative energy and queer-friendly identity. Established in the mid-19th century as an industrial area filled with factories and warehouses, it has since transformed into a district known for its music, food, and inclusive nightlife.

Packed with restaurants, craft beer pubs, and alternative venues, the area’s main thoroughfare is no doubt Smith Street, which was named Australia’s coolest street in 2021 by Time Out magazine. Importantly, Smith Street is also the heart of Melbourne’s LGBTQ+ life and night scene. Here, you can find gay nightclubs, LGBTQ spaces, queer bars, and drag shows.

Many old brick warehouses have been converted into mural-covered art spaces, giving the area a distinctive character.

Transport connections here are excellent. Collingwood is served by Victoria Park and Collingwood stations on the Mernda and Hurstbridge lines, providing direct links to the CBD and the wider metropolitan network. Several tram lines also run along Smith Street and Victoria Parade, providing direct links to central Melbourne. Thanks to the area’s flat streets and its closeness to Fitzroy and Carlton, walking and cycling are also practical and popular ways to get around.

Accommodation in Collingwood is more limited than in the CBD, but options include boutique hotels, serviced apartments, and short-term rentals.

Best Hotels in Collingwood, Melbourne

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St Kilda is a laid-back Melbourne suburb that offers sea views and direct access to the beach.

Why is this the best area to stay in Melbourne:
• St Kilda Beach
• Luna Park
• Esplanade Market
• Acland Street
• Seaside cafés
• Budget hostels
• Sunset views

Located about six kilometers south of Melbourne’s CBD, St Kilda is one of the city’s most recognizable beachside suburbs, particularly popular among holidaymakers and backpackers.

St Kilda Beach has been the suburb’s defining feature since the late 19th century, when it developed as a seaside resort. Today, its wide promenade, calm bay waters, and sandy shoreline attract swimmers, cyclists, and walkers throughout the year. 

Other iconic attractions include places such as Luna Park, a century-old amusement park with a large wooden rollercoaster, and the St Kilda Pier, which dates back to the 1850s. It is a popular lookout point and is also home to a small colony of penguins.

The area also hosts several seasonal events, including the St Kilda Festival, which takes place every February and features free live music across multiple stages.

Nightlife in St Kilda is mainly centered around Fitzroy Street, which features a mix of backpacker bars, LGBTQ+ venues, and pubs. On the other hand, Acland Street offers cafés, bars, and international restaurants.

Transport-wise, tram routes 3a, 16, and 96 connect St Kilda with the CBD, Carlton, and Brunswick. Travel times vary depending on traffic but typically range from 20 to 30 minutes. The area is also pedestrian-friendly, with a flat layout ideal for walking and cycling along the beachfront.

Accommodation in St Kilda includes beachside hotels, budget hostels, and serviced apartments. There are also some boutique stays, many housed in historic buildings.

Best Hotels in St Kilda, Melbourne

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Docklands offers modern hotels and a quieter waterfront location within walking distance of central Melbourne.

Docklands is located immediately west of Melbourne’s CBD, bordering the Yarra River and extending toward Victoria Harbour. Once an industrial port area filled with railway yards and docks, it was redeveloped in the early 2000s into a modern waterfront area with residential towers, office buildings, and public promenades.

During the area’s transformation, the aim was to reconnect Melbourne with its western waterfront. As a result, a new skyline was created, defined by glass towers and wide boulevards.

Among its main attractions are landmarks such as Marvel Stadium, a major sports and events venue that hosts AFL matches, concerts, and international events. Meanwhile, the District Docklands shopping center includes outlet stores, a cinema, and the ArtVo immersive gallery. The area is also known for its public art, including the Cow Up a Tree sculpture and the Webb Bridge, a pedestrian crossing designed with Indigenous basket-weaving motifs.

Docklands has a quieter nightlife scene than inner suburbs like Fitzroy or Richmond. However, it has several harborside restaurants, rooftop bars, and pubs.

Together with the Central Business District, Docklands is part of the city’s Free Tram Zone, which allows free travel to and from the CBD. Furthermore, Southern Cross Station provides access to metro trains, regional lines, and the SkyBus to Melbourne Airport.

Accommodation in Docklands consists mostly of high-rise hotels, serviced apartments, and long-stay business-oriented properties.

Best Hotels in Docklands, Melbourne

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Southbank is one of the best areas to stay in Melbourne for culture and riverside dining.

Southbank lies directly across the Yarra River from the CBD and has developed over the past three decades into a modern center for culture, dining, and high-rise living. The area once contained factories and warehouses, but is now dominated by glass towers and a busy riverside promenade.

The Southbank Promenade is hands down the neighborhood’s main feature. It stretches from Princes Bridge to the Crown complex, and it is lined with restaurants, cafés, and public art, making it one of Melbourne’s most popular walking routes. Cultural venues are also clustered here. For example, the Arts Centre Melbourne stages theater and concerts, the National Gallery of Victoria houses world art collections, and the Melbourne Recital Centre is known for chamber music and contemporary performances.

The nightlife in Southbank focuses mainly on riverfront dining and bars, many of which offer skyline views. In addition, the Crown Casino and Entertainment Complex combines gaming, restaurants, and regular events.

Transport is simple. Flinders Street Station is across Princes Bridge, and several tram lines also run along St Kilda Road. Furthermore, footbridges make it easy to walk between Southbank and the CBD.

Accommodation includes luxury hotels in towers overlooking the river as well as serviced apartments and mid-range options.

Best Hotels in Melbourne’s Southbank

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South Yarra is one of the best areas to stay in Melbourne for shopping and dining.

South Yarra sits about four kilometers southeast of the CBD and has long been regarded as one of Melbourne’s most stylish inner suburbs. Developed in the late 19th century as a residential district for the wealthy, it still shows a mix of grand Victorian houses and modern apartment buildings.

The area’s centerpiece is Chapel Street, a commercial strip that stretches through South Yarra and into Prahran. Here you’ll find designer boutiques, popular cafés, and a mix of bars and restaurants. In addition, Toorak Road adds more dining and shopping choices.

South Yarra is also close to important green spaces, including the Royal Botanic Gardens, which sit on its western edge. In addition, the Tan Track circles the gardens and links to the Yarra River Trail. 

Transport links are excellent. South Yarra Station is a major hub served by several suburban rail lines, while trams run along Chapel Street and Toorak Road to connect directly with the CBD. Thanks to its compact layout and pedestrian-friendly areas, walking between the attractions is also easy.

Accommodation in South Yarra includes boutique hotels, serviced apartments, and upscale properties.

Best Hotels in South Yarra, Melbourne

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Prahran offers nightlife and shopping in one of Melbourne’s oldest markets.

Prahran is located about five kilometers south of Melbourne’s CBD and is locally known for its market and nightlife.

The area’s main attraction is no doubt Prahran Market, which has been operating since the 1860s and is still a landmark for fresh produce and specialty food. As such, it has long been regarded as Melbourne’s premier food market and shopping destination.

The heart of Prahran is Chapel Street, which runs through the suburb and is lined with fashion boutiques, cafés, and small bars. Chapel Street Bazaar is also open daily for antiques and vintage shopping. Another highlight is Greville Street, which has a more relaxed feel and is lined with record stores, galleries, and independent shops.

Nightlife is lively, with pubs, rooftop bars, and clubs drawing younger crowds from across the city. The area also connects seamlessly to Windsor to the south, creating a continuous stretch of dining and entertainment. Furthermore, Prahran Station offers Sandringham line connections, and several tram routes also cross the area.

Best Hotels in Prahran, Melbourne

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Brighton offers beaches, heritage, and art in a relaxed bayside setting.

Located around six kilometers from St Kilda, Brighton is an affluent bayside suburb with a quieter vibe. It is primarily known for its residential streets, beaches, and scenic views across the bay.

The main attraction in the area is Brighton Beach, a long sandy stretch on Port Phillip Bay popular for swimming and sunbathing. The beach is famous for its bathing boxes, a collection of more than 80 timber huts painted in bright colors. Originally built as private changing spaces during the Victorian era, today they are a heritage icon and one of Melbourne’s most photographed coastal sights.

Brighton’s sights also include the Billilla Historic Mansion, an early 20th-century residence set in gardens, and the Bayside Gallery, which showcases local and contemporary art with a focus on the surrounding region.

Transport is straightforward. The Sandringham train line connects Brighton to Flinders Street Station in around 20 minutes; also, there are bus routes along the bay.

Best Hotels in Brighton, Melbourne

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South Melbourne combines a historic market, green spaces, and proximity to downtown.

South Melbourne lies just southwest of the CBD, within walking distance of the Yarra River and the Southside. It has a village-like feel with historic terraces, markets, and tree-lined streets.

The suburb’s main attraction is the South Melbourne Market, which has been operating since 1867 and is still one of the city’s busiest spots for fresh produce, specialty food, and casual dining. In addition, the nearby Albert Park Lake is a large artificial lake used for sailing and rowing, surrounded by walking and cycling tracks. It is part of the park that hosts the Australian Grand Prix each year.

The area is home to historic pubs and cafés, and transport is also convenient. Multiple tram routes link South Melbourne to the CBD in under 10 minutes.

Best Hotels in South Melbourne

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Richmond features major stadiums and plenty of casual dining options.

Richmond is located less than three kilometers from Federation Square. It grew in the 19th century as a working-class suburb and has since become a lively area known for its mix of sport, shopping, and food.

The neighborhood’s best-known landmark is undoubtedly the Melbourne Cricket Ground (MCG), one of the world’s great stadiums and the heart of Australian rules football. Nearby, you’ll also find AAMI Park, a modern rectangular stadium used for rugby and soccer, and Rod Laver Arena, which hosts the Australian Open tennis tournament each January.

When it comes to dining and nightlife, Richmond’s Victoria Street is famous for its Vietnamese restaurants, which have earned it the nickname “Little Saigon.” Meanwhile, Swan Street and Bridge Road have many casual restaurants, bars, and pubs.

Transport is excellent, with Richmond Station serving multiple suburban lines and trams also running along its main streets.

Best Hotels in Richmond, Melbourne

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Finding the Perfect Place to Stay in Melbourne

Globally known as the capital of Victoria and Australia’s second-largest city. Melbourne is located on Port Phillip Bay and is crossed by the Yarra River. It is famous for its laneways, street art, sports, and cultural institutions. When it comes to choosing where to stay, the perfect location depends on what you want to see and do, your budget, and your preferred atmosphere.

The city is laid out with a compact central grid known as the CBD, surrounded by inner districts and extending into both beachside and inland suburbs. Each neighborhood offers a different angle on Melbourne, so the best area will depend on whether you want culture, shopping, food, or time by the beach.

What are the best areas to stay in Melbourne for sightseeing?

In general, Melbourne’s main attractions are concentrated in the central grid and nearby inner suburbs. Highlights include places such as Federation Square, a cultural meeting place with galleries and events; Flinders Street Station, a historic landmark and transport hub; the Royal Botanic Gardens, with expansive green space and walking trails; the Melbourne Cricket Ground, central to Australia’s sporting identity; the National Gallery of Victoria, Australia’s oldest public art museum; and St Kilda Beach, offering a seaside escape close to the city.

Overall, the best location to stay in Melbourne for first-time visitors and sightseeing is the CBD (Central Business District). Here you can walk to attractions such as Federation Square, Flinders Street Station, Queen Victoria Market, and the State Library Victoria. The area is covered by the Free Tram Zone, giving quick access to other parts of the city and making it easy to reach sites located further afield. Southbank and Docklands are also within walking distance of the CBD and provide access to cultural venues, riverfront promenades, and modern landmarks.

Other strong locations for sightseeing include Carlton, home to the UNESCO-listed Royal Exhibition Building and Carlton Gardens, as well as the Melbourne Museum. South Yarra is another option, placing you next to the Royal Botanic Gardens.

What are the top beach suburbs to stay in Melbourne?

Melbourne sits on the shore of Port Phillip Bay, and its beaches stretch south of the city through a chain of suburbs that combine residential streets with waterfront access.

Generally speaking, the best location to stay in Melbourne for the beach is St Kilda, home to the city’s most famous stretches of sand. Both St Kilda Beach and St Kilda West Beach offer swimming and watersports like sailing and kitesurfing. The foreshore is lined with a broad promenade used for walking and cycling, and the historic St Kilda Pier provides views across the bay and is also home to a small penguin colony. Just inland, Luna Park, operating since 1912, adds a historic amusement park atmosphere. St Kilda also has a lively nightlife with bars and restaurants along Acland Street and Fitzroy Street.

Another beachside suburb worth considering is Brighton. Famous for the Brighton Bathing Boxes, colorful wooden huts dating back to the Victorian era, originally used as changing spaces. In addition, Brighton beaches are safe for swimming and well-maintained, and have become one of Melbourne’s most photographed coastal sights.

Other good locations for staying near the beach are suburbs such as Elwood, popular with families for its calmer waters; Hampton, known for its sandy shore and relaxed feel; and Port Melbourne, which has a sheltered bay beach with shallow water for swimming and sunbathing, and the Bay Trail running along the foreshore.

What are the best areas to stay in Melbourne for nightlife?

Melbourne’s busy nightlife stretches across different districts, offering everything from casual pubs and late-night cafés to live music and large clubs. For example, the CBD is the most central option, with laneways and rooftops hosting cocktail bars and small venues. King Street is lined with nightclubs that stay open into the early morning, while Flinders Lane is known for its restaurants and hidden bars.

Fitzroy provides a more alternative atmosphere, with streets such as Brunswick Street and Gertrude Street packed with live music venues, small bars, and pubs that attract younger crowds. Meanwhile, Prahran has its own scene along Chapel Street, where nightclubs and bars sit beside late-night restaurants. St Kilda adds a beachside angle, with Fitzroy Street and Acland Street offering pubs and live music venues.

Melbourne is also one of the most gay-friendly cities in Australia. Fitzroy and Collingwood form the center of the queer nightlife scene, especially around Smith Street, where you’ll find gay nightclubs, drag shows, and LGBTQ+ bars. Each November, the area also hosts Victoria’s Pride Street Party, a major event with stages, performances, and community stalls across Gertrude and Smith Streets.

Traveling on a Budget: Cheapest Areas to Stay in Melbourne

One of the first things you’ll notice when researching places to stay in Melbourne is that, regardless of the district, most accommodations lean toward the higher end of the market. The city is markedly dominated by 4- and 5-star hotels and upscale serviced apartments. As a result, it’s no surprise that the average nightly rate is around AUD 230 for a standard hotel room, making Melbourne one of the most expensive destinations globally.

All things considered, finding budget-friendly accommodation is not about asking “what are the cheapest areas to stay in Melbourne?” As, ironically, the city’s cheapest places to stay are often located in some of its most desirable neighborhoods, where competition and demand have made lower-cost options available.

For example, you’ll find more hostels, guesthouses, and budget properties in St Kilda and the CBD than in the outer suburbs. These range from simple 2- to 3-star hotels to backpacker hostels. For example, nightly rates for a bed in a shared dormitory start at around AUD 30 in St Kilda and AUD 40 in the Central Business District. 

Beyond these central areas, cheaper accommodation can also be found in districts such as Carlton and Fitzroy, where student housing and guesthouses provide affordable alternatives close to attractions and nightlife.

If all fails, you can find a list of all Melbourne accommodations ordered by price here.

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