It's set in Australia, in Melbourne and Frankston ("Frangas"), which then was a beach side getaway from the city. Now just another suburb on Port Phillip.
The most often repeated quote attributed to Ava Gardner from "On The Beach" is:
"On the Beach is a story about the end of the world, and Melbourne sure is the right place to film it."
However, was apparently fabricated by a journalist. Nonetheless, in those days it was largely true.

It was, in every sense, the biggest film ever made in Melbourne. The stars were some of Hollywood's biggest: square-jawed Gregory Peck, glamorous Ava Gardner, twinkle-toed Fred Astaire. No wonder crowds lined the streets to watch them at work.