Byron Bay Backpackers

Try this place, I have a couple of friends who stayed there early last year and they said it was absolutely awesome-nomadshostels.com / arts-factory /

EDIT: I would just ignore the total travel place below me. Obviously, a paid advertisement. "Total Travel" pays for advertising on Yahoo Y! A. Sad I know, but it's just the way it is these days. Check out their links, just remember that it is paid advertising.

Hello,

The Arts Factory is not a place for teenagers to stay. It is a place for young adults (20-28 years) and it's not really close to the beach (20 min walk) and the city is about 15 minutes.

I would say the best place to stay as close to the city, the beach and has a family-type housing would Belongil Beachhouse. It is only 10 to 15min walk from the CBD Byron (as if you walk on the beach or road), 5 minutes on a bike (you can rent bikes) and just 1 min walk to Belongil Beach which is connected to Byron Bays main beach that is monitored.

Being very close to the city, you will not need to drive, which is important in Byron Bay as it is very busy especially on weekends.

Belongil also has a great cafe called the Treehouse you can have a delicious Brekkie or enjoy a wood fired pizza for dinner.