Exclusive homes located on Sydney's Collaroy Beach are in danger of collapsing after high tides and huge waves caused severe erosion for a second night.
Collaroy Beach has narrowed by up to 50m following a massive storm that hit Australia's east coast.
Four people died in the storms and another three are still missing.
Conditions eased in the state of Tasmania on Tuesday and the worst of the weather has passed.
Engineers will assess damage to the houses before property owners are allowed to return.
The Insurance Council of Australia told the Australian Broadcasting Corp that many insurance companies excluded actions by the sea from policies.
This means it is likely that at least some of the damaged properties are uninsured.
Death toll grows
On Tuesday, the body of Mary Kathleen Allford, 75, was found at Latrobe in northern Tasmania.
The island state of Tasmania suffered extensive flooding, with warnings issued for all river basins
Rescuers were not able to save Mrs Allford after her home was inundated, but managed to rescue her husband through the property's roof.
Three other confirmed deaths in New South Wales and the Australian Capital Territory occurred after vehicles were caught in floodwaters.
Three people are still missing, including Trevor Foster, who was swept into Tasmania's Ouse River from his own backyard on Monday.
Media captionThe sea foam phenomenon is relatively rare, it only occurs when a very big storm or cyclone hits the area
Also missing is a man who reportedly jumped into rough seas off Bondi Beach.
Flood warnings remain in place for three rivers in Tasmania, with residents of Invermay and Longford told to evacuate.
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