Kensington

It may be an inner-city suburb only 4km from the CBD, but Kensington somehow manages to retain a village-like charm that feels a world away from a metropolis. This cosy area has a population of less than 10,000 people and the undisputed hub of its activity is the corner of Macaulay Road and Bellair Street where you can visit the local green grocer, indulge in retail therapy, and catch up with friends over coffee or lunch. Melbourne's impressive skyline is visible in the background, a constant reminder that urban excess is just a short drive or train-ride away.

There are plenty of opportunities for rest and relaxation. Situated on the banks of the Maribyrnong River is picturesque Riverside Park, and close by are JJ Holland Park, Newell's Paddock Wetlands Reserve and Moonee Ponds Creek with its winding bike track. The newly built Aquatic Centre has a 25m indoor pool, and there's a skateboard park and a BMX bike track. Flemington Racecourse is only a short trip away.

Kensington's historic Newmarket Saleyards have recently undergone a transformation and are now home to the prestigious residential enclave known as Kensington Banks. Yet the area has retained its old world charm, with a vast number of period homes ranging from charming worker's cottages to more stately family homes.