Severe storms with large hail and damaging winds are forecast to hit two capital cities as the eastern states brace for wild weather on Boxing Day afternoon.

The weather bureau issued warnings after 1pm on Tuesday as storm cells were expected to hit Melbourne and Sydney and some nearby regions.

It came after storms caused severe damage on Queensland’s Gold Coast on Christmas night, causing a trail of destruction that affected homes, powerlines and trees.

Two people have been killed by fallen trees — a woman on the Gold Coast and man in Gippsland, Victoria.

Sydney in firing line

The latest NSW storm warning predicts large and possibly giant hail, damaging winds and heavy rainfall for Sydney, Penrith and Parramatta, the Hunter Valley and parts of the mid-north coast, central Tablelands and Illawarra districts.

Severe thunderstorms are also anticipated in Victoria for people in Melbourne, Maryborough, Castlemaine, Kyneton, Ballarat and Bacchus Marsh.

Eastern states slammed

Severe weather has been hitting hard across Australia’s east coast over the two-day Christmas holiday.

NSW State Emergency Service volunteers responded to 312 incidents on Christmas Day after 492 incidents on Christmas Eve, most of those in Sydney.

It was a white Christmas for some as heavy hail hit the NSW central-west, blanketing lawns.

Residents in the small town of Grenfell were hardest hit when hail struck shortly after midday damaging homes, cars and windows.

There was also hail in Orange, Yass, and across the coast, as far north as Urbenville and Macksville.

A giant hail storm created a wintry white Christmas in central west NSW. Photo: Facebook/Asher Woodrow

At Eurobodalla, 156 millimetres of rain fell in three hours, resulting in some flooding of local roads and properties.

SES crews responded to flood rescues at Albion Park, Kiama, Laggan in the Southern Tablelands and at Bemboka near Bega.

A family was rescued from knee-deep water at a caravan park in Kiama, assistant commissioner Sean Kearns said.

Volatile weather conditions are expected to pick up again on Tuesday afternoon with large hail, heavy rainfall, and damaging winds to hit eastern NSW, large parts of Victoria and south-eastern Queensland.

The Bureau of Meteorology’s Angus Hines said the wet weather would continue for days, including the threat of more severe thunderstorms.

“We’re in the middle of an ongoing storm outbreak,” he told ABC News Breakfast on Tuesday.

“We’re just waiting for a big shift in the weather, a big front to bring something new and clear those storms out. But today is not that day.”

Hines said severe thunderstorms were possible in much of south-east and central Queensland, as well as the northern parts of NSW.

“We might see a storm or two around Sydney this afternoon and into this evening as well,” he said.

Woman killed

Queenslanders were warned to expect more severe weather on Boxing Day with thunderstorms and rain forecast for large parts of the state.

A 59-year-old woman sustained severe head injuries after being hit by a tree at Helensvale on the Gold Coast. She died at the scene.

“We were unable to revive her, which was really quite confronting and quite sad,” paramedic Jaye Newton said.

He described scenes “like a disaster zone” as he was forced to drive around fallen trees on the motorway.

“It was an extraordinary weather event,” he said.

“There were trees all over the road. We are talking whole big trees uprooted.”

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A man in his 70s was also injured by a tree branch that fell onto a tent in Helensvale. He is in a stable condition in hospital with pelvic and back injuries.

A collapsed roof put a man in his 90s in hospital with a head injury, where he remains in a stable condition.

Fallen power lines, felled trees smashing cars and homes and drivers crashing into poles kept ambulance crews busy on Christmas Day.

It took paramedics an hour to wrench one person from a car that was hit by a large tree in the Hinterland district.

The Bureau of Meteorology said a “pretty major storm” had moved through south-east Queensland on Monday night.

“We saw exceptionally damaging wind,” Hines said.

“The strongest wind gust was about 105km/h on the Gold Coast. But, looking at some of the pictures of the trees and the damage, I wouldn’t be surprised if there were some localised areas of even stronger than that.”

Queenslanders have been warned to secure property, stay indoors and only travel on the roads if absolutely necessary.

“This came along quite quickly but the ferocity of it was extreme,”  Newton said.

“Do everything you can to stay out of the storm and in somewhere safe.”

Damaging winds, heavy rainfall and large hail are likely between Mackay and the Sunshine Coast, and are possible south of Charters Towers.

Isolated to scattered showers and thunderstorms are predicted for Tuesday over eastern, northern, and far northern Queensland.

“South-east Queensland is one of those places kind of in the firing line, likely to cop a few more storms throughout the afternoon and evening hours,” Hines said.

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More than 100,000 homes were without power across the south-east on Tuesday morning.

“It’s really becoming a marathon, this isn’t going to be a sprint,” Energex spokesman Danny Donald said.

“It’s a big job and some places, particularly in the more heavily wooded areas, may be without power for a few days.”

Dreamworld and other Gold Coast theme parks were closed on Boxing Day due to the storms.

Meanwhile, severe heatwave conditions continue in the state’s northern interior and north-west, with maximum temperatures above average.

Brisbane is expected to have a maximum of 33 degrees, with showers and the chance of a severe thunderstorm.

In the far north, the clean-up and repairs following ex-tropical cyclone Jasper and severe flooding continue.

More than 4200 property damage assessments have been completed since the system delivered heavy rain and damaging winds.

Twelve homes have been confirmed destroyed, 126 properties are severely damaged and 554 moderately so.

Close to 9000 residents have received financial assistance payments.

Flood warnings remain in place for the Barcoo, Paroo River and Burnett rivers, with a flood watch for parts of the Cape York Peninsula.

-with AAP