Meanwhile Victoria recorded a drop in infections on Boxing Day with 1608 new coronavirus cases and two deaths.
That is less than Christmas Day when the state recorded 2108 new Covid cases and six deaths.
In Sydney, large crowds gathered at beaches for Christmas to beat the heat and ahead of celebrations for New Year's Eve.
There were issues with testing queues on Christmas Day with Randwick's mayor Dylan Parker speaking out about reports he had heard that clinics were in "meltdown".
"Hundreds of people waiting in line for several hours with multiple drive-throughs shut," he posted on Facebook.
"Reportedly now Prince of Wales hospital is no longer accepting walk-ins as the line is too long.
"This mess was totally foreseeable."
Cr Parker said that all three of Randwick's regular drive-in clinics were closed on Christmas Day adding stress to ones that remained open as people sought tests for travel and ahead of gatherings.
A spokesman for Prince of Wales denied that people had been turned away but admitted that lines were long.