We picked up our small car (Toyota Yarris Hatch) in central Sydney and after struggling to fit our backpacks in the incredibly very small boot of this car we headed North towards Newcastle under a great sun. We loved driving a second time through the Harbour Bridge but did not really like the traffic and all the traffic lights on our way out of Sydney. Our first stop was the Ku-ring-gai Chase National Park (entrance fee AU$11 per car), it is where the Hawkesbury River meets the sea. We drove up to West Head and really liked the great views on Broken Bay. We then went to the Northern beaches, we checked out Palm Beach and had lunch (and a swim) at Newport Beach. We have been very impressed how nice is the area and how close it is from Sydney. In the afternoon we drove up to Newcastle really enjoying the great views from the Pacific Highway which crosses beautiful forests. After getting a bit lost in Newcastle we found our way to Port Stephens and found easily our hostel in Anna Bay, which is a very small village. The hostel also has a campground where a very cute little kangaroo hangs around and where you can spot koalas in the trees. We were very lucky to see one koala not long after we arrived. It was so cute. The hostel itself is made of wooden bungalows linked by wooden walkways, quite nice but it was really too hot in the dorms.