There were 42 rescues in Sydney overnight, with more than 250 personnel across the city responding to about 500 calls for assistance, particularly in the south-west, NSW State Emergency Service said.
It was especially severe in Fairfield, about 30km from the city centre, where six people were rescued after becoming stranded by rising floodwaters on Vine Street.
A few streets over, about a dozen properties were evacuated due to floodwater inundating homes on Spring Street.
SES Assistant Commissioner Dean Storey said people should be vigilant during a sudden weather event such as this.
"Flash flooding is a real risk and can occur quickly, without much warning," he said.
"We urge people to steer clear of floodwaters and never drive through a flooded road – regardless of how safe you think it may be."
Thousands of commuters were stranded on major arterial roads, including Anzac Bridge, and parts of Parramatta Road were closed.
The Bureau of Meteorology said more rain was expected on Friday but it is easing ahead of the annual Mardi Gras parade, where thousands of revellers will celebrate in Sydney's city centre on Saturday.
About 15-70mm of rain is forecast for Friday and thunderstorms are also expected.
Other parts of Australia have also been deluged. The remote town of Birdsville in southwest Queensland received nearly 60 per cent of its annual rainfall of 161mm in one day after 93mm of rain fell.
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