Sydney: Thousands of Australians started returning home on Monday after floodwaters in the wine-rich Hunter Valley eased, but residents further downstream near the coal port of Newcastle may be evacuated, officials said.

"It is like a ghost town," Lee Bennett told local radio when he returned to the town of Maitland which was evacuated on Sunday.

"The SES (state emergency services) are collecting sandbags. Its just a matter of waiting for people to return."

The major storm which has been battering Australia's east coast, causing the worst flooding in the Hunter Valley for 30 years and beaching a coal ship, eased on Sunday.

Nine people were killed over the weekend as heavy rain and strong winds pounded the area from northern Sydney to the Hunter Valley.

Around 5,000 residents from Maitland were evacuated on Sunday fearing the swollen Hunter River would break levees overnight. Floodwaters failed to breach sandbag levees, leaving the town dry but surrounding farms flooded.

"We now have the all clear," said New South Wales State Emergency Services spokesman Phil Campbell. "Those people behind the levees...may return to their businesses and homes."

However some 400 residents from the farms outside Maitland were unable to return home due to floodwaters.

The floodwaters moved downstream on Sunday towards Newcastle, one of Australia's major coal export ports, but were not expected to cause severe flooding.