Melbourne is the eclectic coastal capital of Victoria, Australia. From stunning beaches to vibrant bars and hipster hotspots, there’s so much to explore in this fascinating city.

As magnetizing as it is, it can be difficult to work out just where to stay in Melbourne on a budget. Australia isn’t the cheapest country to travel in, so we’ve gone and figured out the city’s top budget accommodation.

We’ve narrowed our list down to the five best cheap hostels in Melbourne to suit any travel style. Whether you’re looking to socialise or just want an affordable base for exploring the city, we’ve got you covered!

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    Melbourne City Backpackers, Melbourne 1
    Goon is a staple for budget backpackers!

    This is one of the cheapest hostels in Melbourne city centre, ideal for anyone travelling to Australia on a budget. It’s not just cheap, either. The interiors here are fresh and modern, with spacious hang-out areas where you can meet and mingle with other travellers.

    Advertising itself as “a clean and friendly hostel”, this place frequently receives glowing reviews from happy guests, often citing the awesome staff who make this place the best Melbourne hostel for backpackers.

    There’s a free breakfast on offer (always a plus) as well as a series of events to get involved with that won’t break the bank. Kitchen facilities help you stick to your shoestring budget, too. Spaghetti hoops on toast, anyone?

    How to find Melbourne City Backpackers:

    This modern hostel located in the middle of Melbourne CBD offers free wifi and air conditioning. From here, it’s a 10-minute walk to Marvel Stadium, Melbourne Aquarium and Queen Victoria Market. Other attractions nearby include the State Library of Victoria and the delights of Chinatown as well as Melbourne Gaol. The surrounding streets are also teeming with bars, cafes, and restaurants. It’s also a short walk to Southern Cross Station.

    In terms of room options, Melbourne City Backpackers has the following dorm choices:

    • Female-only dorm
    • Mixed dorm

    There are a few private rooms available, too: 

    • Single room
    • Double room
    • Triple room

    Prices start from $14 USD per night.

    Melbourne City Backpackers, Melbourne 2

    Any extras?

    It may be a fairly simple place to stay, but this cheap Melbourne hostel still has some perks for guests to enjoy. These include:

    • Free Wifi
    • Free breakfast
    • Laundry facilities
    • Netflix
    • Key card access
    • Cafe
    • 24-hour reception
    • Free walking tours

    For a budget hostel in Melbourne central, this one has so many perks. You’ll be saving money on food and transport when you’re here as you’re right in the city centre, and the friendly vibe makes all the difference.

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    The Nunnery, Melbourne 1

    Set in an old nunnery dating back to 1888, this is possibly the fanciest looking cheap hostel in Melbourne. The interiors retain much of their historic opulence, but it’s become hip budget accommodation packed full of cool communal spaces. The best aspect of The Nunnery is its rooftop terrace, which boasts stunning views of the skyline of Melbourne CBD.

    This hostel has become a “home away from home” for many travellers and is a super social place to be. Budget credentials include a lavish free breakfast each morning and a roster of free events to keep guests entertained. That’s got to make it one of the best Melbourne hostels for backpackers!

    How to find The Nunnery:

    Location-wise, this awesome budget hostel is in Melbourne’s hipster Fitzroy district. You’ll be a two-minute walk from the trendy Brunswick Street, and cultural hotspots such as Melbourne Museum, Carlton Gardens and The Melbourne city conference centre. There are also a whole host of bars and shops right on your doorstep and you’re still super close to Melbourne central business district.

    As for sleeping arrangements, The Nunnery has a number of different rooms for varying budgets. The dorm options include:

    • Mixed dorm
    • Female-only dorm

    And if dorms don’t take your fancy, there are some private rooms on offer, including:

    • Single room
    • Twin room
    • Double room

    Prices start at $15 per night.

    The Nunnery, Melbourne 2

    Any extras?

    As well as its historic credentials, The Nunnery definitely has a lot on offer in terms of facilities and activities. These include: 

    • Free Wifi
    • Free breakfast
    • Free bike hire
    • Laundry facilities
    • Free sporting equipment for hire
    • Fully equipped kitchen
    • Outdoor terrace
    • Key card access

    The events organised at this Melbourne hostel include:

    • Movie nights
    • Free meals
    • Pub crawls
    • Wine and nibble nights
    • “Pancake Sundays”
    • BBQs (with wine supplied)

    With free perks and events galore, The Nunnery really is a fantastic option for those who want to stay in a social hostel in Melbourne on a budget. It’s good fun and even better value for money!

    Summer House Backpackers Melbourne, Melbourne 1

    This particular hostel strikes up “a work/life balance” – that’s because it’s geared towards not just backpackers but travellers on a working holiday too. So if you’re a digital nomad looking for a base for a few weeks, this could be a great budget option, especially with their great free wifi.

    Housing it’s very own on-site bar, this is a social hostel where the drinks are free-flowing, and where there’s always something going on, from live music to trivia nights. There’s also a stunning rooftop terrace where you can enjoy DJ sets while overlooking St Kilda beach.

    On the other end of the spectrum, there are things like workspaces and a cosy common room with a TV for quieter downtime. Weekends here do tend to get a little more raucous, however.

    How to find Summer House Backpackers:

    This budget-friendly hostel in Melbourne is ideally located smack bang in the centre of backpacker-friendly St Kilda. Specifically, you’ll be right near the hustle and bustle of Acland Street, as well as Luna Park and the esplanade. Tram, train, and bus stops are all in easy reach, so getting to central Melbourne is a breeze.

    Summer House Backpackers Melbourne has the following room options available. Firstly, the dorms include:

    • Mixed dorm
    • Female dorm

    For those looking for some privacy, there are a few different private room options on offer:

    • Twin room
    • Double room
    • Triple room

    Prices start from $22 per night.

    Summer House Backpackers Melbourne, Melbourne 2
    This is the best cheap hostel for work-life balance

    Any extras?

    There are also some pretty good events going down at this Melbourne hostel, but first, let’s take a look at the amenities and facilities that make life easier for guests: 

    • Free drink on arrival
    • Public bar (called Hotel Barkly)
    • Free pool table
    • ATM
    • Rooftop bar
    • Key card access
    • Free breakfast
    • Wheelchair friendly

    As for the events, there’s a whole lot of fun to be had here, including:

    • Trivia nights
    • Live music in the Hotel Barkly public bar
    • Pancake Sundays
    • “Sunday Sessions” DJ sets at the rooftop bar
    • Rooftop BBQs

    This is more than just a cheap hostel in Melbourne. It pretty much becomes a home for long-term travellers – a place where the adage “work hard, play hard” comes into full swing. Plus, it’s located in one of Melbourne’s coolest areas right by St. Kilda beach.

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      Base St Kilda, Melbourne 1

      Base St Kilda offers up style, friendliness, and a big party atmosphere. This buzzing vibe is helped along by a lively staff, who are always on hand to kick things off.

      Although it’s what we’d call a “party hostel”, Base St Kilda also caters to families with larger private rooms. The rooms are new and fresh, with big windows bringing in plenty of natural light.

      Hangout spaces are plentiful. These include a big dining area, huge outdoor terrace and a happening bar. Just outside the hostel, you’ll find some of Melbourne’s coolest bars and restaurants.

      How to find Base St Kilda:

      Aside from being just a cheap hostel in Melbourne, it’s located in one of the city’s best areas. It’s right near the beach and Luna Park, here you can take a dip in the St. Kilda sea baths. There are a ton of cafes and bars along nearby Acland Street. It’s only two stops on public transport to central Melbourne from here, so you can easily explore the city.

      There are a variety of dorm options here, including:

      • Mixed dorm
      • Female dorm

      Private room options include the following:

      • Twin room
      • Double room

      Prices start from $13 per night.

      Cheap hostel in Melbourne, Base St Kilda

      Any extras?

      Of course! There are a bunch of different amenities and perks to staying at Base St Kilda, which are listed below:

      • BBQ
      • Wheelchair friendly
      • Security lockers
      • Onsite “Red Eye Bar”
      • Free Cancellation 
      • Pool table
      • Free pancakes
      • Communal kitchen

      Being party-oriented, there are also many events geared towards good times (mostly at the Red Eye Bar), including:

      • Boozy bingo
      • Live music
      • Happy hours
      • Stand-up comics
      • Jelly wrestling (we aren’t sure, either)
      • Party nights

      If you’re not in town to party, you might be put off by how alcohol-centric Base St Kilda is. But that doesn’t mean you have to get involved. It’s a really nice modern hostel with luggage storage space and air conditioning and the beachside location might just be enough to sway you. Otherwise, party on!

      United Backpackers

      United Backpackers, Cheap Hostel in Melbourne

      A great all-rounder of a hostel, United Backpackers has a friendly atmosphere. That’s probably partly helped by the aesthetics – it’s decked out with bright interiors and colourful artwork throughout. 

      One thing that does make it pretty lively is the fact that there’s space for around 300 guests to stay at any one time. That usually means that the hostel bar is jam-packed each and every night. So, as well as being budget-friendly, it’s a pretty party-ready hostel. 

      However, there are also plenty of spaces to chill out. There’s a cinema room complete with comfy couches, and dorms are spacious and clean. Beds come with individual power sockets, which are game-changers when it comes to budget accommodation!

      How to find United Backpackers:

      Another budget hostel situated in the Melbourne CBD, United Backpackers is well located for exploring Melbourne. In fact, Flinders Street station is right opposite the hostel. It also sits right on top of the happening Degraves Street Laneway – one of Melbourne’s iconic laneways that’s popular among locals and visitors alike. It’s also close to St. Paul’s Cathedral and within walking distance of The Royal Botanic Gardens.

      Being a large hostel, there are a fair few room options available to you. The dorm choices include:

      • Female dorm
      • Mixed dorm

      There are a couple of private room options, too, including:

      • Twin room
      • Double room

      Prices start from just $14 per night.

      United Backpackers, Melbourne 2

      Any extras?

      Being the awesome hostel that it is, United Hostel has plenty of cool stuff up its sleeve to keep things convenient (and fun) for its guests. These include:

      • Cinema room
      • Key card access
      • Cable TV
      • Basement bar (called Lost & Found)
      • Free pancakes
      • Pool table
      • 24-hour reception
      • Free tea and coffee

      The events going on here make this place much more than just a cheap hostel in Melbourne to spend a night or two. They’ve literally got something different going on every night, often in their Lost & Found bar. Activities include:

      • Pizza nights
      • Happy hours
      • Live music
      • Quizzes
      • Games nights
      • Free walking tour
      • Wine tastings
      • Day trips

      This place has actually won awards for being The Best Hostel in Melbourne. There are literally thousands of reviews, most of them backing up their award-winning credentials.

      United Backpackers is one of our favourites in Melbourne but they’re not taking guests right now. We’re not sure if they’re closed for good but we hope they’ll come back soon.

      FAQ about Cheap Hostels in Melbourne

      Melbourne nightlife
      Melbourne has some amazing nightlife options!

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      Final Thoughts on Cheap Hostels in Melbourne

      If you’re travelling to Melbourne on a shoestring budget, there’s no cheaper way to stay than in one of its many backpacker hostels. Some Melbourne hostels may be quite party-oriented, but there are plenty that offers a chilled atmosphere that’s perfect for a bargain stay in this epic city.

      Despite being cheap, you won’t have to compromise on the location of these hostels. They’re all located close to Melbourne’s top attractions in the city centre, so you’ll barely have to rely on public transport.

      Which hostel caught your eye? Let us know in the comment section below!

      And for transparency’s sake, please know that some of the links in our content are affiliate links. That means that if you book your accommodation, buy your gear, or sort your insurance through our link, we earn a small commission (at no extra cost to you). That said, we only link to the gear we trust and never recommend services we don’t believe are up to scratch. Again, thank you!