The ongoing rain may have caused a landslide at the Farm in Killalea State Park.
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Shell Cove resident Brad Jenkins said the slip at the eastern side of the beach had occurred on Thursday.
"There could have been 30 tonnes of rock and soil that's come down at the end of the beach," Mr Jenkins said.
"Also, there's all these fissures in the rock and you can see the water flowing out the rock face. If anyone's sitting near that rock there could be a fatal incident."
Across the Illawarra, the rain had caused localised flooding across some roads, including Taylor Road and Station Street at Albion Park and the rail underpass at Federal Street, Minnamurra.
There were also reports of water over the road at Windang.
Playgrounds and sportsfields are sodden, with plenty of weekend sport called off.
There is unlikely to be any respite from the rain either, with the Bureau of Meteorology predicting it will be hanging around for some time.
This weekend will be wet with shower and thunderstorms and temperatures in the low 20s.
The bureau is also predicting a high chance of rain every day through to Wednesday.
The long-range forecast doesn't look good either, with autumn tipped to be wetter - and also warmer - than usual.
"Above-average autumn rainfall is likely for most areas of Australia, except the south-west and north-east," a statement from the bureau said.
"Autumn is likely to be wetter than normal for much of Queensland and scattered areas of south-eastern Australia."
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