Melbourne’s galleries, food scene, laneways and varied entertainment have helped crown it the world’s best city for 2026 by Time Out magazine. But for locals, the reality is more layered. In this photo essay, Isabel Chalmers explores the benefits and challenges of living in this city.
Shiloh outside St Paul’s Cathedral. Photo: Isabel Chalmers
Chinatown’s diversity
Steam curls around the red lanterns that sway gently, in sync with the people filtering through Chinatown. The clinking of dishes tangles with an array of aromas, tickling the noses of passersby. School kids on city trips stop to watch as the dumpling chefs roll out the dough for the lunch rush. Sticky fingers and hot breath stain the glass windows. The businessmen and women of Melbourne frequent hotspots after work and tourists clutch to-go boxes as waiters filter through the crowds with a local know-how. The buildings hum with a blend of Cantonese, Japanese and Mandarin, and conversations from all generations spill into the restaurants.
Shanghai Village is considered one of Melbourne’s most popular restaurants in Chinatown, according to Broadsheet. It’s known for its cheap and plentiful plates of dumplings, steamed or fried. It has a hectic, fast-paced, buzzing atmosphere. For restaurant worker Vicky, the people here are lovely and, when you miss home, you can find comfort in these restaurant walls.
“In Shanghai Village we are always fully booked on Friday and Saturday, especially last Saturday, we had 600 bookings on one day,” she said.
This bustling atmosphere, cultural diversity and loud energy are some of the factors that gave Melbourne the Time Out title this year. But beyond the data, tourism headlines and the vibrant environments, locals say Melbourne is difficult to live in.
Affordability issues
Young people from far and wide swarm the city centre. From fresh graduates filtering into their first career-defining jobs, those who have moved for better opportunities, university students and people doing their year abroad, to all those who have grown up living in Melbourne.
Eighteen-year-old university student Shiloh, lives and breathes Melbourne’s intensity. Commuting into the city and working in retail and hospitality, she has seen it all.
“Even though there are so many challenges and it’s so difficult, sometimes I’m like I don’t know if I can keep doing this, but I love it here, you meet people from every single walk of life here, and I think that’s why I keep working in Melbourne,” she said.
For many young people, it is this contradiction that defines Melbourne – demanding but undeniably alive.
“I definitely think Melbourne could be the best city, but I can’t call it the best city until it’s the most liveable city,” Shiloh said. “Rent’s gone up, the job market in the city is so dire. I am working two jobs, and my friends are working three jobs while in uni because we’re still trying to support ourselves.”
A struggling rental market
Forge Real Estate director Malcom Lee said the city’s housing market was under pressure. Increased costs are making it harder for landlords to recoup on their investment and is discouraging others from entering the market.
“It’s very hard (for landlords) to make money – the rent keeps increasing, so everyone thinks the owner will earn more, but the (mortgage) interest rate has pretty much doubled,” he said.
New government regulations and compliance costs are also pushing landlords to increase the cost of rent to cover their expenses.
“There’s a lot of regulations, so they need to spend more money for the regulation checks, I’m talking thousands of dollars,” Mr Lee said.
He has seen the flow-on effect firsthand over the past 10 years.
“I used to be a top agent. In 2016 I sold 29 (properties) a month. But now you can see that my company sells few, like five per month,” he said.
Back in Chinatown
Stampedes of people pour from office buildings as dusk settles over the city. Students, tourists, workers and families all crowd the streets in search of their next meal or the nearest tram. Chinatown fills once again, its glowing red lanterns lighting a path toward some of Melbourne’s most treasured restaurants.
This constant flow of energy in the laneways, buildings, and restaurants earned Melbourne its title as the world’s best city for 2026. And its residents seem to mostly agree – the pressures of living here are outweighed by the endless possibilities.
