Trams rattle through Melbourne's flat, gridded streets

The capital of the state of Victoria, what Melbourne lacks in sex appeal, it certainly makes up for in sophistication.

With its fashion sense, cafe culture, book shops, galleries and thriving performing arts scene, it easily earns the title the "cultural capital of Australia".

Despite the absence of sweeping surf beaches, a glittering harbour and headline-hogging architectural icons, this unpretentious, multicultural and sports-mad city of more than three million people frequently treads all over Sydney to top "world's most livable cities" lists.

Melbourne is also Australia's most European city, with rollicking trams, narrow laneways and Victorian-era architecture. The city centre fans out from the banks of the Yarra River and its reasonably compact Central Business District is flanked by parks.

Notable sights in the CBD include the Old Melbourne Jail where the death mask of bushranger Ned Kelly has pride of place, the cultural hub that is Federation Square and the bustling, open-air Queen Victoria Market. Further afield, the swanky seaside suburb of St Kilda, the Italian neighbourhood of Carlton and the arty district of Fitzroy all guarantee a good time exploring the restaurants, pubs and boutiques.