Melbourne’s split by the Yarra river, with the Central Business District (CBD) straddling the northern bank. Stereotypes abound for those living on either side; the North being for hipsters and artists. With long brunches in organic cafes, sprawling picnics in parks, vintage clothing spots, cozy bars, gay and lesbian hangouts. Whereas the South is posh and refined, quiet residential streets and for those who might like to be seen in gym gear, post ‘work-out,’ at cafes. Think brand name shopping strips, clubs with all night dancing & Melbourne’s beach promenade, St. Kilda, with its sun-burnt British.
My advice is to stay north, in the suburbs of Fitzroy & North Fitzroy. Tiny Westgarth and sprawling Northcote are also great, but try to be on the city side and close to High Street if you choose either of these. Brunswick and East Brunswick are a little further from the centre and whilst they’re rapidly gentrifying, are less so than Fitzroy and Carlton and have a great diversity and about them. A lot of backpacker accomodation is in the suburb of North Melbourne which is perfectly nice, but a little bland and somewhat isolated from the action.