The story was the same all along the coast as families and tourists did their best to forget the rainy end to 2011 by lapping up the warm weather and clear skies that are expected to continue for the most of the week.
Those not up for a swim still made the most of the outdoors, with some gathering friends and families for BBQs at home and others finding a sunny beer garden in which to enjoy a relaxing lunch.
Watson's Bay Hotel general manager Justin Carroll said yesterday was the busiest since last January.
"It's really busy, it's been fantastic and it took us a little by surprise actually," he said. "I think with all the rain we have had lately people were really in a mood to get out and enjoy the perfect weather."
It was the same on the northern beaches, with the popular Newport Arms Hotel packed with families enjoying the water views and those recovering from the night before.
Meanwhile, in what has become a New Year's Day tradition, thousands of music fans made their way to the Domain for Field Day.
The festival played host to an international array of electronic music artists, including US DJ Moby, to kick off 2012 with a bang.
"It was the best Field Day yet and we are extremely pleased with the event," promoter Jon Wall gushed.
Dana Creedon, 20, and her friends have been every year since they were 18. They just can't say no to the good weather and the crowd.
"It's just the vibe you get," Ms Creedon said.
Echoing her sentiments was Paris Forscutt, 21: "Every year is a good year at Field Day."
The city's usual major attractions were also popular, with families determined to make the most of the sunny long weekend.
Taronga spokesman Mark Williams said the zoo had enjoyed good attendance figures over the past week and yesterday's perfect weather only helped that trend continue.
"This time of year is always a busy time for us and the weather meant that New Year's Day was no different," he said.
Sydney's day of relaxation came after Saturday's New Year's Eve celebrations were declared a virtually trouble-free success.
Sydney Lord Mayor Clover Moore said the partygoers who made their way into the city to welcome in the New Year were overwhelmingly well behaved.
More than a million people gathered around the harbour foreshore to usher in 2012, but only 57 arrests were made. "Police said it was quieter than most Saturday nights," Ms Moore said.
"You think about what it's like sometimes in Kings Cross or George St on your average Saturday night, that was amazing."
About 11.30pm, police and paramedics responded to reports of a male aged in his early 20s who had impaled his left thigh after attempting to jump a fence in the Botanic Gardens.
Ms Moore defended the $6.3 million cost of the fireworks display, saying it equated to $4 for every person who watched the event around the Harbour, and the fireworks generated $156 million for the local economy.


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