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Travelers to Australia often put Sydney on the very top of their list, and for good reason. The city might be famous for its giant harbour and opera house, but there is so much more to see and do here. Sydney is known for its fantastic nightlife, stunning beaches, and fresh local seafood. 

The waterfront district is the perfect place to stroll through weekend markets and green parks. It’s also a great city if you love history, as there’s something significant on every corner. In addition, there are a ton of great day trips and weekend trips from Sydney for those who want to explore beyond the metropolis.

However, it is a massive city and for those visiting, especially for the first time, it may be overwhelming to figure out where to stay in Sydney, Australia.  Sydney can be expensive and finding a hotel that fits your budget can be tougher than you think.

Having visited Sydney many times, we’ve had the opportunity to check out many parts of the city and compare the best areas and neighbourhoods to stay throughout the city. 

where to stay in sydney australia
Sydney Harbour NSW. Photo courtesy of Tourism Australia

Read on to find out our recommendations for the best neighbourhoods in Sydney and the best hotels in each part of the city for every budget!

Where to Stay in Sydney, Australia: The Best Neighbourhoods and Hotels

Surry Hills

Surry Hills is an awesome part of central Sydney that gives you a local feeling while still being close to all the fun and excitement the city has to offer. There are great places to go shopping and tons of quirky art galleries to explore, and it’s the food capital of the city, with tons of charming cafes and restaurants. All these things and more make it one of the best places to stay in Sydney, Australia.

where to stay in sydney australia
Street art in Surry Hills. Photo courtesy of JAM Project via Flickr CC

Best Hotels in Surry Hills

Luxury: Little Albion

After staying at Riley, another Crystalbrook Collection Boutique Hotel in Cairns, we would not hesitate to recommend Little Albion as the luxury hotel option in Surry Hills. Constructed in a historic building that used to be a convent, Little Albion is filled with stunning design, intriguing art, and all the comforts of home. You’ll especially love the rooftop patio, string lights, and open drink and snack bar.

Mid-Range: Cambridge Hotel

The Cambridge Hotel is an excellent option for those with a moderate budget who want to be right in the center of Surry Hills. The hotel was clean, modern rooms and is an AAA Tourism recognized eco-friendly accommodation.

where to stay in sydney australia - surry hills - cambridge hotel
Photo via Cambridge Hotel 

Budget: Shakespeare Hotel

For something really different, try staying at the Shakespeare Hotel (otherwise known as “The Shakey”). It is best known for being a bustling, 19th-century-style restaurant that serves up pub food and great beer, but there are also five rooms above the pub that offer great value for money. If you are looking for a unique place where to stay in Sydney, Australia the Shakespeare Hotel is a great option.

Bondi Beach

Bondi Beach is located to the southeast of Sydney’s city center and is well worth a visit, or even a few days’ stay. There’s so much to do here, but it’s especially well-loved for bright blue waters, warms sands, and a fun atmosphere. Surfers come here to ride the world-famous waves and outdoor lovers enjoy the cliff walks and trails that follow the coastline nearby.

where to stay in sydney australia
Bondi Beach, NSW. Photo courtesy of Tourism Australia

Bondi is also beloved for it’s buzzing gastronomy scene, as well it’s youthful nightlife. Whether you’re looking for a relaxing getaway or a party atmosphere, there is truly something for everyone. If you don’t know where to stay in Sydney, Australia, definitely consider Bondi Beach.

Best Hotels in Bondi Beach

Luxury: QT Bondi

QT Bondi is a quirky and fun designer hotel right by the water. It’s colourful and modern with lots of roomy suites and awesome views of Bondi Beach and the famous swimming pool. The inviting atmosphere and impeccable taste make QT one of the best places to stay in Sydney, Australia.

Mid-Range: Hotel Bondi

For a mid-ranged budget, Hotel Bondi is an excellent option. It’s right on the beach and has a bright, airy atmosphere featuring a restaurant, beer garden, and its own spirits shop.

where to stay in sydney australia - Hotel Bondi
Photo via  Hotel Bondi Facebook Page

Budget: Wake Up! Bondi Beach

Wake Up! Bondi Beach is an energetic backpacker hostel just steps away from the ocean. Recently renovated and always clean, the hostel has a slew of daily activities to participate in, such as surfing, yoga, personal training, and more. Both dorms and private rooms are available.

The Rocks/Circular Quay

Right downtown and at the center of all the action, The Rocks and Circular Quay are two small side-by-side neighbourhoods with tons of charm. They’re located by the famous Sydney Harbour Bridge, a must-visit tourist attraction. They’re also steps away from the Royal Botanic Gardens, Mrs. Macquarie’s Chair, and (of course) the Sydney Opera House.

where to stay in sydney australia
Sydney Harbour, Australia

Best Hotels in the Rocks/Circular Quay

Luxury: Sir Stamford Hotel

Sir Stamford is a stunning 5-star hotel right on Sydney Harbour. With an antique design, the hotel is cozy and welcoming. It has a rooftop swimming pool with harbour views and is also a TripAdvisor GreenLeader on the gold level.

Mid-Range: Russell Boutique Hotel

The Russell Boutique Hotel is a 3-star accommodation that feels like a home away from home. It has cozy rooms and a rooftop terrace, and it’s located close to the harbour. There are tons of tasty bars and restaurants just around the block.

where to stay in sydney australia - - the russell
Photo courtesy of Russell Boutique Hotel 

Budget: Sydney Harbour YHA

It’s no secret that we love YHA Hostels and the Sydney Harbour YHA is no exception. This award-winning hostel has unbelievable harbour views, clean and inviting common spaces, and follows a huge list of sustainability measures.

View from the rooftop of the Sydney Harbour YHA

Figuring out where to stay in Sydney, Australia can be a bit of a challenge sometimes, but these three neighbourhoods are truly great options.

  • The Rocks are perfect if you want to be right downtown near many top attractions.
  • Surry Hills gives off the perfect combination of local charm and historic vibes.
  • Bondi Beach is outside the city center but is still a hotspot for travelers who love the beach, surf, and nightlife.

When you choose where to stay in Sydney, Australia, keep these three very different but equally interesting neighbourhoods and their best hotels in mind. You won’t be disappointed, regardless of which one you choose.

Have you ever visited Sydney? What’s your favourite neighbourhood or hotel there?

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We spent many years living and traveling around Australia exploring the country in-depth!


Our FREE AUSTRALIA Travel Guide is a great resource for planning a trip to Australia!

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