Vandrarhemmet ligger nere vid kusten.

Swedish makes compounds into a single word much more often than English does.

• vandrarhem = hostel / youth hostel
• base form: ett vandrarhem
• definite singular: vandrarhemmet = the hostel

The ending -et shows that it is:

• an ett-word (a neuter noun), and
• in the definite singular

So Swedish usually does not need a separate word for the here. It is built into the noun itself.

It is a compound noun:

• vandra = to hike / wander
• hem = home

Historically, vandrarhem is something like hikers' home or travellers' lodging, but in modern Swedish it simply means hostel. In many contexts it can be translated naturally as hostel rather than trying to keep the literal image.

In Swedish, ligga is very commonly used for location.

So:

• Vandrarhemmet ligger vid kusten = The hostel is located by the coast

Even though ligga literally means to lie, it does not mean the building is physically lying down. With places, towns, buildings, islands, etc., it often just means is situated / is located.

This is more idiomatic than using är in this kind of sentence.

Compare:

• Stockholm ligger i Sverige.
• Hotellet ligger nära stationen.

Ligger is the present tense of ligga.

A few useful forms are:

• infinitive: ligga
• present: ligger
• past: låg
• supine: legat

So in this sentence, ligger means lies / is located in the present.

This is a very common question.

• ner / ned usually suggests movement downward
• nere usually describes location: down, down there, lower down

Since the hostel is in a place, not moving anywhere, nere is the natural choice.

So:

• Vi går ner till kusten. = We are going down to the coast.
  movement
• Vandrarhemmet ligger nere vid kusten. = The hostel is down by the coast.
  location

Nere adds a sense like down there or lower down.

It can suggest things like:

• lower in elevation
• farther south
• closer to the shore
• simply a speaker's perspective: down by the coast

Without nere, the sentence would still work:

• Vandrarhemmet ligger vid kusten.

That version is a bit more neutral.
With nere, it feels a little more vivid or spatial.

Vid usually means by, near, or at.

So:

• vid kusten = by the coast

It suggests being close to the coast, not necessarily directly on the shoreline.

A learner may also wonder about på kusten:

• vid kusten = by/near the coastline
• på kusten = on the coast / in the coastal area

There is some overlap, but vid often sounds more physically close to the edge or shore.

Because Swedish normally uses the definite form here:

• kust = coast
• kusten = the coast

This is similar to English, where you would normally say the coast, not just coast, in this kind of sentence.

So:

• vid kusten = by the coast

Using bare kust here would sound incomplete or unnatural.

The sentence has normal Swedish main-clause word order:

• Vandrarhemmet = subject
• ligger = verb
• nere vid kusten = adverbial phrase of location

So the pattern is basically:

• Subject + verb + place

But Swedish is a V2 language, which means the finite verb comes in the second position in main clauses. So you can also move the place phrase to the front:

• Nere vid kusten ligger vandrarhemmet.

That is also correct.
When that happens, ligger still has to stay in second position.

A very natural way to understand it is:

• The hostel is down by the coast.
• or The hostel is located down by the coast.

If you translate too literally, you may get something like The hostel lies down by the coast, which is understandable but less natural in English. In Swedish, though, ligger is completely normal in this kind of location sentence.