Independent Families: 'Where can we stay with our children in central Sydney?'

Q. We are planning a trip to Sydney in August to see the city with our daughter, who'll be almost three. Can you suggest suitable family-friendly accommodation somewhere fairly central, which isn't a soulless, modern tower-block hotel? A self-catering apartment would be ideal but we don't know where to begin. Stuart Daniel, London

A. Although bleeding out at its edges into a dull suburban sprawl, central Sydney is richly compact. At just over two miles from the rather misleadingly named Central Station in the south, to the Harbour Bridge in the north, it could have been designed for a toddler to explore. There are wide, buggy-friendly pavements, pelican crossings at every intersection of its Manhattan-style road grid, and a short-but-sweet, seven-stop underground rail service that rings the centre.

It's hard, however, to escape the ubiquity of the tower block. Central real estate is so precious that the overwhelming majority of hotels and serviced, self-catering apartments – a justly popular form of short-stay accommodation – are housed in exactly the characterless high-rises you want to avoid. Still, such a crowded market means that if you close your eyes to the aesthetics there are bargains to be had, particularly for low-season visitors. For instance, in August the Oaks Maestri Towers (0061 29267 9977; www.theoaksgroup.com.au) on Sussex Street has smart, one-bedroom apartments, with a roll-away bed for your daughter, a lounge and fully equipped kitchen, from A$207 (£87) per night. The building is just a couple of minutes' walk from Darling Harbour in the CBD.

At the other end of town are the cramped, cobbled streets of The Rocks, home to some of the oldest houses in the city, and typically described as "quaint" in tourist brochures – though scrubbed-up and self-consciously cute might be more accurate. The Rendezvous Stafford (0061 29251 6711; www.rendezvoushotels.com.au) on Harrington Street, with exemplary views across the water to the Opera House, is a low-rise apartment complex fronted by two self contained, 19th-century terraced cottages. These have a much more homey, cosy feel than any serviced apartment, though you'll pay a lot more for the privilege of self-catering in a slice of historic Sydney: from A$262 (£111) a night low season for a studio, to A$354 (£149) for a converted terrace house.

You could also consider renting a holiday home – typically a renovated Victorian cottage or art deco apartment – in the city's inner-eastern suburbs of Paddington, Darlinghurst or Woollahra. These areas have largely retained their village feel, with a hotchpotch of small shops and once-modest artisan homes, now highly prized for their painted plasterwork and lacy wrought-iron balconies. Life is quieter here, but there is still fast access to the city centre via the suburban CityRail service – the train from Edgecliff station to Town Hall in the centre takes just eight minutes (0061 28202 2000; www.cityrail.info).

The only drawback is that there isn't a huge market in Sydney for this type of accommodation, so you'll have to do some digging – try Tourism Australia's search facility (www2.australia.com), or rental agencies such as OzStayz (online only, www.ozstays.com) or Rentahome (0061 29319 0888; www.rent-a-home.com.au), which put you in touch with private owners. For example, Ozstayz lists an architecture award-winning two bedroom apartment – Tibet House – in Woollahra. The bright, infinitely stylish property rents for A$235 (£99) per night.

Alternatively, Rentahome has a pretty, newly renovated terrace house on Gipp Street in Paddington. Flat-fronted, with painted wooden shutters and a charming patio garden, it has two bedrooms facing each other on the first floor, a kitchen, laundry room and sitting room downstairs, and two small but smart bathrooms, all for a reasonable A$1,030 (£433) a week in August (although there is a two-week minimum stay at this property). Paddington's main drag is Oxford Street, a concatenation of shops, bars and cafés that hosts a vibrant fashion and food market every Saturday. The surrounding leafy streets are also worth exploring, being particularly well-stocked with art galleries and odd little craft shops.

Or, if your budget allows, you may prefer a larger, more lavishly furnished two-bedroom house in Surry Hills, directly south of the city centre. Also available through Rentahome, this has a wooden fitted kitchen with a distinctly Balinese feel, an indoor water garden, lounge, study and separate dining room, and a lovely covered outdoor eating area with a barbecue, for A$1,885 (£782) a week in low season.

Wherever you settle on, avoid buying your food and other supplies from any of Sydney's hundreds of "convenience stores". These may well be convenient – in the city centre there's often one or more on every block – but the prices are anything but, with customers often paying up to three times what they would elsewhere. Stock up instead at local markets, or even at Woolworths, the Sainsbury's of Australia. You'll find large branches, carrying all the basics plus very high quality fruit and veg, in Paddington, Surry Hills, Potts Point and – right in the centre of the action – by the Town Hall on the corner of Park and George Streets.

For more information on Sydney, visit www.sydneyaustralia.com

Send your family travel queries to The Independent Parent, Travel Desk, The Independent, 191 Marsh Wall, London E14 9RS or email crusoe@independent.co.uk