The Bureau of Meteorology predicts that areas around Sydney and the Newcastle region could reach 10 to 20 millimeters on Sunday, in the Illawarra between 20 and 40 millimeters.

Residents were also warned of dangerous surfing conditions in Byron Coast, Coffs Coast, Macquarie Coast, Hunter Coast, Sydney Coast, Illawarra Coast and Batemans Coast.

Beach conditions in these areas can be dangerous and people should stay well away from the surf and surf-exposed areas, the agency warned.

The large swell is caused by a low pressure area near New Zealand and a high pressure area over Southeast Australia.

Rain is expected to clear off from coastal areas on Monday, but could return as early as Wednesday.

The severe weather warning came as thousands of NSW residents returned home Saturday to begin the long journey of recovery from the latest flood.

On Sunday, the Hawkesbury River finally came below flood level and more people returned home.

It was no easy feat for Joanne Kendall and her husband Chris.

Mr. Kendall has battled leukemia and is now in remission but has been busy clearing it up.

The federal government extended flood disaster payments to eight other local government areas devastated by floods.

Residents of Cumberland, Mid Coast, Muswellbrook, Nambucca, Newcastle, Port Stephens, Randwick and Warren are now eligible for the payments.

Prime Minister Dominic Perrottet said on Saturday it would take a “major effort” to repair the damage to the flood-affected communities.

“I had the opportunity this morning to fly with (Emergency Secretary Steph Cooke) over Maitland and Singleton and see the extent of the damage from above,” he said yesterday.

“And I had not missed the huge challenge that lies ahead, not only for local communities but also for governments, to ensure that we get our communities back on track.”