The Nunnery is my favorite among the six accommodations I know in Melbourne (long trip).
Let me first clarify that the Nunnery is in fact two separate properties--a large backpackers/hostel and a smaller guesthouse next door. I stayed in the guesthouse, which I believe is more oriented toward private rooms and a bit more upscale overall. From the first, this place was warm and welcoming. We checked in at 1am, but found the front desk friendly, helpful and alert. We then ambled next door through a small enclosed courtyard that sets the guesthouse back just a few feet, and into a charming Victorian house. Our room was lovely and full of character, overlooking a verdant courtyard (where guests can take breakfast, so important to keep the drapes shut, haha). The shared bathroom was simply the best I have ever seen, with a jacuzzi bath, large shower, and plenty of space--all immaculate and new. Breakfast is self-service and no-frills, just bread with jam and cereals.
All this came at a very fair value. The rate fell within the same range as other private rooms with shared baths I'd stayed in (a band of +/- $10). Though perhaps on the higher end of this range, our experience was significantly more pleasant and the room much larger.
In terms of location, the Nunnery is perfect in my view. Many will tell you to stay in the Central Business District for its centrality and convenience, and I would agree if you have only one or two days in Melbourne. But if you're staying a bit longer, Carlton is the place to be. It's just a 5-10 minute walk from the best part of the CBD, and also walking distance from the hip neighborhood of Fitzroy and the cool cafes on Lygon Street. For the Nunnery in particular, there's a lot to be said for the quiet and restfulness that comes from staying across the street from a large park.
This review is the subjective opinion of a TripAdvisor member and not of TripAdvisor LLC