The Spanish capital of Madrid is made up of more than 128 different neighbourhoods, or barrios, each with its own distinct personality. To help you uncover the city’s best sides – from historic buildings to contemporary galleries, and lush green spaces to luxury shopping strips – we’ve rounded up our top five areas.

1. Old-world splendor in Retiro

Ok, this district actually consists of several barrios, but it’s very compact and every major sight is within easy walking distance. It’s one of the most popular spots for Expedia’s Aussie travellers to stay, for usually 2-3 nights, when exploring the city. And there are plenty of major sights to choose from, for example two of the greatest museums in the world: the Prado with its breathtaking collection of European art ranging from the 12th to the 19th century and the more modern Reina Sofia, home to Picasso’s wartime epic Guernica. Outside of the galleries, there’s plenty more art to marvel at. The district’s wide boulevards are lined with imposing statues and ornate fountains, and then there’s the charmingly old-school Retiro Park, with its formal gardens, boating lake and fragrant rose bushes. As you walk from gallery to green space, stop off at Chocolat Madrid for some takeaway churros – a cheap pleasure among all the cultural riches.

2. Shopping in Salamanca

In the city’s chicest neighourhood, the streets are lined with high-end boutiques and smart restaurants. With its designer kudos – expect to find Gucci, Chanel and Prada rubbing shoulders with Spanish designers such as Adolfo Domínguez – and futuristic architecture, Paseo de la Castellana (La Castellana for short, or The Castilian’s Mall in English) can easily steal a few hours of your time, and a few hundred dollars from your bank account. Relax after your retail therapy with a drink at the suitably extravagant Magnum Bar in Villa Magna, where the champagne flows from 5pm till 2am. Grab a spot on their palatial terrace and contemplate your new acquisitions while sipping a blush-pink and delightfully fizzy Billecart Salmon Rosé (a steal at 29 euros a glass).

3. Palacio’s palaces and plazas

This barrio’s historic buildings tend to attract all the attention, such as the baroque-style Royal Palace and Almudena Cathedral (with its imposing white façade), but don’t forget to check out the colorful San Miguel Market on Plaza Mayor – it’s the place for cheap and tasty tapas while watching the locals go about their shopping; expect hand gestures, fierce bargaining and plenty of passion. The reconstructed covered market opens at 10am each day, and closes at midnight on Monday, Tuesday, Wednesday and Sunday. Sample local delicacies, including freshly opened spiny sea urchins (just scoop out the tangy orange flesh with a teaspoon) and award-winning tortilla by acclaimed chef Senen González.