Five elite teens from around Australia find placement in Arcadia House, a hostel in Sydney. Ava must cope with a new, cool music school, a haunted bedroom and her desire to make friends despite her crippling shyness. Levi and Zoe meet and form an instant attraction but an old family feud keeps them apart. Zoe struggles to find a connection with the other girls in her elite athletics squad, and must also face the fact that down here in Sydney, she is not the fastest runner. Meanwhile, Lily, a tough girl from Kempsey, spends the whole of her first week scheming to find a way back home. When she receives an offer from a stranger to drive her home, the news worries the others. And rich boy Dylan defies his parents, who think he's come to Sydney to study classical violin, when he secretly changes his course to electronic music production.

Mick and Vee resort to a team building scavenger hunt to get the kids to bond but Lily escapes the event and heads out to find the Sydney she remembers from her early years with her mother. Disappointed that things have changed and her quest was hopeless, Reece shows her a part of Sydney that is still the same. Meanwhile, as Dylan, Levi, Ava and Zoe find a new connection through the competition, Reece and Lily return to the house with the winning item in the scavenger hunt at the last minute. Because of this Lily finally starts to accept that maybe Arcadia House is the right place for her after all.

When an opportunity to further develop her budding friendship with Jasmine leads to an opportunity to sing with a famous DJ, Ava must face the question of how far she is prepared to go to succeed in this new city. But coming face to face with her overpowering fear of performing in public and the realisation that she has let herself be pressured into this whole situation because she is too shy to speak up for herself, makes Ava face some tough lessons. When all the housemates sneak out to watch Ava sing, and are inevitably caught, Vee is furious. Her punishment fits their crime but the night out helps to bond them as a group.

Levi discovers Reece is homeless and sleeping rough in the school gym. After spending the day with Reece and seeing the grim reality of his home life, Levi invites Reece to come back and stay at Arcadia House.Meanwhile, Dylan receives a visit from his high profile Dad who organises what he thinks will be a treat. Lily challenges Zoe to a boxing match to settle things between them, and Ava and Zoe discover the truth about Lily's mum.

Out one night doing his stencil work, Dylan is confronted by the local graffiti crew. He gets away but the next day realises that one of the crew is Ryan, a student at SIM. He finds the courage to come clean to Ryan and before he knows it, is finally part of a 'graff' crew. Reece is handed a form that he thinks requests him to identify as Aboriginal. Torn by his desire to stay in the house, and emboldened by Levi, he asks Lily if he should just lie. Will a last minute reprieve from Mick and Vee, as well as support from all the other housemates, save the day and allow Reece to be part of the 'Arcadia House Mob'?

A major athletics meet brings Zoe's family down from Darwin to visit, compelling Levi and Zoe to suppress their growing romance. But tensions explode when the two families meet and discover that Zoe and Levi have been secretly seeing one another. Zoe is forced by her father to admit that she was feeling ashamed by the arrival of her large and enthusiastic family and he tells her that she should never forget where she came from, and never stop being proud of that. Faced with a choice between family obligation and teen romance, will Zoe choose her family and break up with Levi?