Sydney Harbour YHA, The Rocks

A hostel with harbour views? Sydney Harbour YHA raised the bar for budget accommodation when it opened in the historic Rocks district in 2009. Located on top of an archaeological site (check out the remnants of the convict-era houses in the foyer), it’s within walking distance of the Opera House, the Harbour Bridge and Circular Quay. It’s pricey (by YHA standards), but it’s clean, modern and close to public transport. Splash out on a room with a harbour view or enjoy it for free from the rooftop terrace.
• 110 Cumberland Street, +61 2 8272 0900, yha.com.au. Dorms from A$45 (£24), doubles from A$175(£95), 10% off for YHA members

1888 Hotel, Pyrmont

1888 Hotel is refreshingly honest about the dimensions of its smallest room category. The Shoebox is just 15 square metres (no cat swinging, please), but is still equipped with a decadent queen bed, smart TV, in-room iPad and a walk-in rain shower. A short stroll from Darling Harbour, the hotel opened in August in the shell of a former wool shed and is an attractive mix of exposed brick walls, soaring ceilings and mismatched furniture. If you’re tempted to take a photo, do. Instagrammers with more than 10,000 followers get one night free.
• 139 Murray Street, +61 2 8586 1888, 1888hotel.com.au. Shoebox doubles from A$159 (£86) B&B

Tara Guest House, Enmore

Owners Julian and Brom have put their design backgrounds to good effect at Tara Guest House. Each of the property’s four spacious suites has been individually styled, with features including marble fireplaces, double French doors, four-poster beds and even a piano. Brom also worked as a commercial cook so you can expect a lavish breakfast spread, and both of them are fountains of knowledge on Sydney and its surrounds. While a bus will whisk you into the city in 25 minutes, be sure to explore the neighbouring suburb of Newtown, famed for its ethnically diverse restaurants, quirky boutiques and live entertainment venues, such as the Enmore Theatre.
• 13 Edgeware Road, +61 2 9519 4809, taraguesthouse.com.au. Doubles from A$175 (£95), including breakfast and airport transfer (for stays of two nights or more)

Royal Hotel, Randwick

Torn between the city and the beach? Randwick is a good compromise, with regular buses to the city centre and Coogee Beach a 15-minute saunter down the hill. The recently renovated Royal is an upscale take on staying in a classic Aussie pub, with a tasteful makeover swathing its 40 rooms in a palette of creams, browns and greys, while preserving the building’s heritage-listed charm. Free Wi-Fi, free parking and a great value A$10 lunch menu from local chef Danny Russo (try the wagyu cheese burger) make this a compelling proposition.
• 2 Perouse Road, + 61 2 9399 3006, royalhotel-sydney.com. Doubles A$150 (£80)

Camping, Cockatoo Island

Surely the cheapest waterfront accommodation in Sydney, a campsite on Cockatoo Island will set you back a wallet-warming A$45. A delightful 10-minute ferry journey from Circular Quay, Cockatoo is the largest of Sydney’s nine harbour islands and still bears the scars from its previous incarnations as a penal settlement and shipyard. Since being spruced up by the Harbour Trust and opened to the public, it’s become a popular day-trip destination and concert venue. For self-caterers, there’s a well-equipped camp kitchen; for everyone else, there are three cafes and bars. Not got a tent? Try the glamping packages, which includes a pre-erected tent, camp beds, bedding and sun loungers from A$125 a night.
• +61 2 8898 9774, cockatooisland.gov.au. Pitches from A$45 (£24)

Admiral Collingwood Lodge, Drummoyne

Built in 1888, this former millionaire’s Italianate mansion is now a 15-room lodge offering clean, spacious twin, double and family rooms. While the decor is light and modern, many heritage features remain, including kauri timber floors and an original marble fireplace. Guests are free to use the communal kitchen, garden and barbecue, or there are restaurants and cafes galore in the nearby picturesque village of Drummoyne. Although the city is only a 15-minute bus ride away, most people prefer the ferry so they can bask in the mesmerising views of the Harbour Bridge and Opera House en route.
• 5 Collingwood Street,+61 2 9181 3881, admiralcollingwoodlodge.com.au. Doubles from A$115 (£62)

Bounce Sydney, Surry Hills

Hostel or boutique hotel? The purpose-built Bounce Sydney manages to be both, offering spacious queen rooms with flatscreen TVs and private bathrooms, alongside the more traditional backpacker fare of dorm rooms and communal areas. Conveniently located next to Central Station, it’s a trilby toss from the bars, restaurants and vintage shops of hipster-infused Surry Hills. Although the interior decor of the rooms is on the bland side, a funky rooftop and colourful dining room spice things up. All of which have helped it win Hostelworld’s Best Hostel in Australia award for the last two years.
• 28 Chalmers Street, +61 2 9281 2222, bouncehostel.com.au. Doubles from A$149 (£81)

ADGE Apartment Hotel, Surry Hills

If you’re travelling with friends, check out ADGE’s two-bedroom, two-bathroom apartments conveniently located in Surry Hills. ADGE has bravely eschewed the traditional I-could-be-anywhere hotel colour scheme and installed bold murals and bright carpets. The apartments are modern, spacious and scrupulously clean with balconies, well-equipped kitchens and LED TVs. Free Wi-Fi, a welcome drink and a nightly turn-down service all elevate this well above the normal serviced apartment experience. The most difficult decision will be deciding who gets the bedroom with the en suite.
• 222 Riley Street, +61 2 8093 9888, adgehotel.com.au. Two-bedroom apartments from A$274 (£150)

Macleay Hotel, Potts Point

Potts Point is one of Sydney’s most attractive inner-city suburbs with wide, tree-lined streets and an abundance of excellent cafes and restaurants. Macleay Hotel is at the posh end, far enough away from the nightlife in Kings Cross, yet still close to public transport and only a 15-minute walk to the city. Don’t expect cutting-edge design, but all rooms have a small kitchenette and those on the higher floors offer commanding views of the city or the harbour. A guest laundry on each floor and free Wi-Fi in the lobby help save the pennies.
• 28 Macleay Street, + 61 2 9357 7755, themacleay.com. Doubles from A$165 (£90)

Sydney Harbour Bed and Breakfast, The Rocks

Traditional B&Bs are rare in Sydney. To find one in the heart of The Rocks with clean rooms, good service and reasonable prices is like finding a four-leaf clover. Young owners James and Linda do a fine job of running this intimate, heritage-listed property. Rooms come in a variety of configurations (some with shared bathrooms), have tea-and-coffee making facilities and feature hand-crafted furnishings and polished floors. Location-wise, it’s hard to beat – walking distance from the big-ticket trio of Circular Quay, the Harbour Bridge and the Opera House.
• 140-142 Cumberland Street, +61 2 9247 1130, bbsydneyharbour.com.au. Doubles from A$165 (£90), including breakfast

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