I'm here on the east coast since early September. Flew into Brisbane, then kited in the Byron Bay and Lennox Heads area, afterwards traveled up the coast by car (I'm currently in Cairns).
I kited the following spots:
Byron Bay und Lennox Heads: Kinda like Waddell, but I prefer Waddell.
Ayr (Alva Beach): Awesome.
Noosa: Best spot ever
Caloundra: This is as good as it gets.
Whitehaven Beach: Just visited, but haven't kited. You need a boat to get there from Airlie Beach.
You can lookup all of the afore mentioned spots on kitebeaches.com - if you have any further questions, just ask.
I will be in Sydney from Dec 31st until Jan 5th, then fly up to Brisbane and travel to a few kitespots by car (Noosa, Caloundra etc.) for 2-3 weeks.
It's supposed to be pretty windy on January in the Sunshine Coast area (at least I read this on seabreeze.com.au forum), don't know how it is further south...
How are you traveling? By car? Regarding cheap accommodation, you can just stay at hostels which are roughly about AUD $15 to $25 per night.