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The best budget hotels and hostels in Sydney

From wallet-friendly four-star hotels to boutique hostels, here are the best cheap hotels in Sydney

Contributor: Talia Stanton
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No one could ever accuse Sydney of being cheap, but that doesn’t mean there aren’t budget-friendly hotels to be found in this seagirt jewel of a town. We've rounded up the best affordable hotels in Sydney, from off-the-beaten-track four-star secrets to reliable chains that business travellers depend upon. We’ve also compiled the city’s neatest and most reliable go-to hostels for backpackers, many of which offer single and double occupancy and ensuite rooms, not just intimidating dorms.

Be warned, peak season in Sydney has dizzying highs and even the most reasonably priced accommodation can spike over the New Year’s Eve period. So, shop around if you're looking for a place to lay your head over the holidays.

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Can’t stretch to that? Pack your tent and check out the best camping spots near Sydney
Or simply say YOLO to your bank balance and book one of the city's best luxury hotels 

Who makes the cut? While we might not stay in every hotel featured below, we've based our list on top reviews and amenities to find you the best stays. This article includes affiliate links. These links have no influence on our editorial content. For more information, see our affiliate guidelines.

Cheap hotels in Sydney

  • Hotels
  • Hostels
  • Sydney

The 1980s vintage hotel formerly known as the Y has been renamed and madeover. From cosy micro nooks to deluxe stays, every room at Song Hotel is as sleek as the next. Song Kitchen serves international cuisine in collaboration with sustainable producers. But, the highlight of this place has to be the location; it's right next to the famous Hyde Park and Oxford Street, and close to a bunch of trendy shops, bars and places to eat – including Paddy's Markets. 

Mood? Minimalist and bright. 
Budget range?
On the high end of cheap. 
Time Out tip: You’re spoilt for choice for restaurants, bars and entertainment nearby. The innovative dining cultures of Surry Hills and Darlinghurst are a stone’s throw away, while the CBD’s Thainatown and Koreatown are just two blocks west. Burn off any over-indulgences at Cook + Phillip Park Pool, one block north.

  • Hotels
  • Newtown

Staying at the heritage-listed Sydney Park Hotel is like staying at your cool Nan’s house – all the retro style with a familiarly warm welcome. The pub hotel’s recent renno complements the building’s character. Sleek leather armchairs and a compact storage unit are made more comforting with plush pillows, recycled Merino-wool blankets and neon artwork. The Superior King room boasts a decorative fireplace and wall-mounted telly with every streaming service. The bathrooms are super clean, but you might need to wait in line – there are only a few toilets and showers between eight rooms. The shared kitchen does a complete turnaround in style, with smooth monochrome surfaces and stainless steel appliances giving budget-conscious travellers the option to dine in.

Mood? Blending retro modern. 
Budget range?
One of the cheapest. 
Time Out tip: If you are heading out, the hotel puts you in prime position to explore the late-night haunts of Newtown. 

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  • Hotels
  • Newtown
  • price 2 of 4

Newtown and Enmore are incredibly popular neighbourhoods with Sydneysiders. They’re crammed with decent dining options for any budget. There are great bars and pubs on every block, and because the area is outside Sydney’s lockout zone, the party can go on all night. The low-key Urban Newtown opened in late 2014 and brings the Inner West-vibes inside with cool colours and bare concrete finishes and graffiti art on the walls. The 79 rooms are clean and bright, with suite, kitchenette and balcony rooms available – and some are even pet-friendly. 

Mood? Cool and hip. 
Budget range?
Average among the 'cheap hotels in Sydney' category. 
Time Out tip: The Urban is by far the most convenient hotel to the Enmore Theatre – one of Sydney’s most-loved live music and comedy venues. There’s a big-name show on every other night, so see who’s playing while you’re in town.

  • Hotels
  • Surry Hills
  • price 2 of 4

If you’re looking for a party pad with design chops and the soul of a grown-up hostel, Hotel Harry will hit the spot. All rooms have antique-inspired fixtures, in keeping with the hotel’s heritage listing (it was built in 1912), and the decor is fun and vibrant. Because this is a heritage building, they can’t mess with the facade, which means there’s not a lot of uniformity between rooms. Located above very popular Surry Hills bar Harry's, the hotel, opened in 2015, has 20 rooms, and infinite opportunities to mingle with the locals. The speakeasy-style bar downstairs is packed on weekends, with international DJs bringing the party vibes until late. Just because it’s a party bar doesn’t mean you can’t eat there – the menu is dude-food heavy (think dirty burgers and tacos) but well executed. The bar kitchen takes care of the room service, so if you’d rather not socialise, you can just eat in.

Mood? Speakeasy-cool. 
Budget range?
Hostel-worthy prices. 
Time out tip: You get what you pay for here – there are fairly spacious suite options, and much more affordable, smaller spaces – including single bed rooms. Light sleepers should avoid lower-level rooms overlooking the central courtyard which can be very loud on weekends.

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  • Hotels
  • Cremorne Point
  • price 1 of 4

If aesthetics are more important to you than convenience, then Cremorne Point Manor may well be for you. Set in a 19th century harbourside building on the leafy north shore of Sydney, surrounded by millionaires’ mansions, the Manor is one of the city’s oldest hotels. Old does not, however, mean dated. Rooms have been renovated as recently as 2017. Design is modern, in a light, bright palette that complements the hotel’s sunny aspect. Surrounded by waterside walking tracks and not much else, the Cremorne Point Manor will allow you to experience one of the most unusual virtues of being a Sydney local and get about by ferry. The hotel is an eight minute walk to Cremorne Point Wharf, and from there you can catch a ferry to the city in just ten minutes – meanwhile, Taronga Zoo is just one ferry stop away in the other direction. Many rooms have harbour views and generous ensuite bathrooms.

Mood? Scenic surroundings. 
Budget range?
Slightly higher than the cheapest options. 
Time Out tip: The ferry is close to this hotel, but the nearest shopping strip is a 20-minute walk uphill. If you’re drawn more to Sydney’s natural beauty than its activities, then this spot shows the city in one of its finest aspects – but you’ll need to factor in extra time for getting around.

  • Hotels
  • Boutique hotels
  • Pyrmont

Over the course of a two year revival, the Terminus Hotel has swapped dust and dereliction for boutique room service. But co-owners and restoration partners of the Terminus haven’t forgotten its historic place in Pyrmont, with the hotel’s interiors maintaining some original architectural features and a traditional feel. Nine double rooms are on offer, two boasting private ensuites and the remaining seven sharing bathroom facilities. Sharing a bathroom means saving on cost, and as Airbnb hosts the booking function for the hotel there's no reception area or communal areas – except the pub downstairs, that is. As you'll be sleeping above a potentially noisy pub, be ready to join the party to save on the price of a more centrally located bed for the night. 

Mood? A stylish boutique. 
Budget range?
Pretty cheap. 
Time Out tip: You'll be a stone's throw from trusty Italian trattoria Bar Zini for breakfast, dinner and drinks. You're also walking distance from the Star casino and the Lyric Theatre

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7. Nomads Hostel Sydney

Hostels are a great budget option if you're looking to socialise in a city, and a stay at Nomads comes with plenty of opportunities to do so. As one of the best Sydney hostels, this place has a jam-packed events calendar, including daytime excursions and themed nights at the neighbouring bar, Scary Canary. Those needing some peace and quiet can book a room with a private bathroom, and there's a huge shared kitchen on the bottom floor with lots of space to cook and enjoy your meal without being disturbed (unless you want to be). 

Mood? For sociable travellers. 
Budget range? Shared dorms account for tight budgets. 
Time Out tip: Be sure to really make your money stretch by heading to the kitchen for free pancakes on Tuesdays, using your guest discount at the bar and trying to win the cash prize at one of their fun games nights. 

Best hostels is Sydney

  • Hotels
  • Haymarket

The largest of the YHA properties in Sydney, this place has it all. Deep breath: kitchen, laundry, separate games, dining and TV rooms, high-speed internet terminals, mini supermarket, café, underground bar and a rooftop pool, sauna and barbecue area with panoramic city views. Popular activities include pub crawls, big-screen movie nights and walking tours. All of this is housed in an imposing, heritage-listed building opposite Central Station. There are around 50 twin rooms, some en suite, and dorms that sleep up to eight. There are also disabled-adapted rooms, 24-hour access, parking ($14), indoor pool, restaurant, TV rooms and easy connection to the lightrail.

  • Hotels
  • Hostels
  • Sydney
  • price 1 of 4
Capsule Hotel
Capsule Hotel

If you’re a single traveller who is more private than claustrophobic, and are looking for accommodation at dorm-room prices, then the Capsule Hotel is your silver bullet. All sleeping pods have Netflix-enabled TV screens, and there’s free, fast Wi-Fi throughout the hotel. The Capsule Hotel is located bang in the centre of town and a short walk downhill from Darling Harbour. 

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  • Hotels
  • Surry Hills

Travelling up and down the wide, brown land can be a lonely and exhausting experience. It's times like those when you need a no-frills hostel experience, with clean rooms and plenty of people in the same boat to share experiences and get really drunk with. Big Hostel is centrally located, reasonably priced and has all the facilities you require to transform all you travel blues into hazy and hungover memories.

  • Hotels
  • Stanmore

The Cambridge Lodge provides everything you need to have a grown-up hostel experience. The unique location provides access to the super-cool trend centres Newtown and Enmore, while also being close to some of the city's best outlying dining districts like the Petersham and Leichhardt. The hostel itself is housed in a big old building that has the feel of a country manor. Having all this only a speedy train ride away from Sydney’s CBD means that the Cambridge Lodge is perfect for those who want to see Sydney in a new and different light.

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  • Hotels
  • Hostels
  • Potts Point

Established in 1980, this sprawling hostel in a Victorian mansion may look a little on the lived-in side, but it has plenty of character – not to mention lots of extras such as a lovely spacious courtyard, free bed linen and towels, 24-hour check-in and $10 airport pick-up (very welcome after spending a day on an aeroplane). There are single, double and family rooms as well as ten-person dorms, which are mixed or female only. Most bathroom facilities are shared but all well maintained. There’s usually something going on in the courtyard, whether it’s karaoke or an Aussie barbie. The kitchen is big and modern, with food lockers, and there are laundry facilities available as well.

  • Hotels
  • The Rocks

Nestled comfortably in the middle of Sydney's historic district, the Rocks, Sydney Harbour YHA is fitted with airconditioning, barbecue and internet. The thing to really write home about, however, is the view from the rooftop terrace of the Sydney Harbour Bridge and Sydney Opera House – wow barely covers it. The hostel is surrounded by colonial pubs and is only a short trip via public transport to the city's premier nightlife areas.

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  • Hotels
  • Hostels
  • Haymarket

This YHA hostel, built in a former parcels shed, is very near its Central counterpart the Sydney Central YHA. The design incorporates a real disused railway platform, with some dorms housed in replicas of train carriages (very Harry Potter) with bathrooms in the main building adjacent. Most dorms have between four and eight beds, and there are a couple of en-suite double rooms. It’s clean and bright, with a large open-plan communal area dotted with sofas, a sizeable kitchen, laundry facilities and an internet café. Mod cons include a sun terrace and airconditioning. It’s very popular, so book ahead.

  • Travel
  • Potts Point
Backpackers HQ
Backpackers HQ

This Potts Point joint is a hop, skip and a jump from the Cross's flashing lights but distant enough to offer some reprieve if you require it. All the good stuff is on offer here (aircon, free breakfast, security lockers) plus the added bonus of a trendy interior.

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  • Surry Hills

No one would disagree when we say that Surry Hills is Sydney's core of cool. That's why Bounce Hostel's location in the Surry foothills, is perfection for the discerning glampacker (glamorous backpacker). Wander up to Crown Street for some vintage shopping and a peerless café latte or make your way to Oxford Street to see and be seen as you're cutting a rug or two. All this and more is within sauntering distance from Bounce's charming decor and agreeable room rates. The hostel is opposite Central Station so getting anywhere in Sydney or NSW is simplicity.

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  • Glebe
Glebe Village Backpackers
Glebe Village Backpackers

With so much of Sydney’s backpacker accommodation squeezed into one or two inner-city suburbs, choosing a place to stay can feel a little arbitrary. The Glebe Village offers a whole new experience to those who are a little jaded the same-old, same-old approach of other hostels. Only a short distance from the centre of town, Glebe, with its cafés, bars and vintage markets, offers travellers the perfect opportunity to live and breath like a local. With all the comforts of your average hostel and the added benefits of a boutique B’n’B, the Glebe Village makes for a truly different backpacking experience.

Got a little more to spend?

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