Sydney is a very safe city with a terrific mass transit system, so you could stay nearly anywhere near the CBD. (Central Business District) That’s where all the sights are, so it would be easiest to live close in, but not directly there, as it’s busier and everything is more expensive. We lived in Paddington, right on Oxford Street, its’ main drag. It worked for us because we loved being right near Centennial Park and the bus lines, especially the 333, took us right into the city very easily and conveniently.

However, if we were to do it again, I think I’d look at staying in Surry Hills. It’s not as upscale as Paddington, but it’s still near the park, got great little enclaves of restaurants like Paddington does, and is a lot closer in. It’s also right near the train station, which is the center of all things mass transit. (except for the ferries – the center of that is Circular Quay up by the Opera House, but that’s ground zero for tourists, too.) Darlinghurst is also a place I might consider, but for both neighborhoods, I’d avoid being on or near Oxford Street from Hyde Park to about Victoria Street because that’s the center of the LGBT culture here and it’s lined with night clubs and bars – I’m sure it gets very noisy at night. The Kings Cross Area could work, as it has good transportation connections but is a lot of high rises and can be busy. South of the city, Haymarket, is the Chinatown area, so there’s good food, but can be busy. The other side of CBD has less options. Pyrmont is still very touristy, as is Ultimo. Barangaroo is very much a business district and is mostly hotels and offices. The Glebe is a beautiful neighborhood – childhood home of Olivia Newton John – and is close enough for easy access, but it’s mostly single family homes and might not offer much in the way of affordable places to stay.

I wouldn’t get a place that you have to depend on the ferry because they don’t run nearly as often as the busses and the trains.