Saturating rain along the NSW coast means trees are likely to fall as wet and windy conditions return, while the government explores options for the overflowing Warragamba Dam.
Hundreds of people remained isolated and major rail lines were still down on Tuesday after heavy rain struck across the state at the weekend, leaving as many as 30 homes uninhabitable.
The NSW State Emergency Service warned on Tuesday afternoon further severe weather would likely continue until Wednesday morning, including potential gusts up to 100km/h, which could topple trees.
"Given the recent extreme weather experienced across much of the coast over the last few days, the soil is already saturated so there is an increased chance of trees falling," SES Acting Assistant Commissioner Dallas Burnes said.
Fallen trees and leaking roofs prompted dozens of calls on Tuesday afternoon across Sydney and the Central Coast, he said.
A fallen tree also closed the Snowy Mountains Highway at Bemboka for several hours.
The Bureau of Meteorology warned areas from the mid-north coast to Sydney's south could be hit with dangerous winds and hazardous surf on Tuesday night.
Councils along the Hawkesbury River have reignited calls for the Warragamba Dam wall to be raised, promised by the former coalition government but abandoned under Labor.
Sydney's largest reservoir spilled water equivalent to half of Sydney Harbour after hitting 100 per cent capacity on Saturday, according to Water NSW.
Premier Chris Minns said rebuilding the dam wall would take eight to 10 years, at enormous cost, and would not stop flash-flooding in western and northwestern Sydney.
"Forty-five per cent of floodwaters in the Hawkesbury, Richmond catchment don't come over the top of Warragamba Dam, so we could be in a situation where we raise Warragamba, we spend $2 billion and those communities are still inundated by flooding," he told reporters on Tuesday.
But Mr Minns said the government would look at potential changes, including dropping the maximum allowable water level at Warragamba, as long as Sydney's drinking water supply could be supplemented.
The premier reiterated the government's commitment to spend $200 million on improving evacuation infrastructure, emergency levees and road evacuation routes.
NSW Opposition Leader Mark Speakman said communities along the Hawkesbury-Nepean River were yet to get receive funding and evacuation routes were not up to the task.
Hawkesbury mayor Sarah McMahon said she was yet to see a promised flood mitigation plan for the area.
About 800 residents have returned to their homes northwest of Sydney and along the Hawkesbury after evacuation orders were lifted when flood levels significantly receded along the Hawkesbury and Nepean rivers.
More water is also expected to be discharged from Warragamba Dam in the coming days.
Parts of the south coast rail line remain out of operation with significant damage to tracks.
In the Blue Mountains, bulldozers are set to cut a temporary evacuation road in the Megalong Valley after a landslip blocked the only access road, isolating 150 residents and 200 tourists.
