Witness Aaron Armstrong said Emerald Beach (EB) was very popular and many locals were in the water enjoying and celebrating Father’s Day.
Mr Armstrong told the Australian Broadcasting Corporation: “Yeah, it will change the fabric a little bit for a little while in EB, that’s for sure.”
He said it was the first shark attack in the community that he and other locals knew of.
New South Wales state is under a coronavirus lockdown but people can leave their homes for exercise, including swimming.
Before Sunday, the most recent fatal shark attack in Australia was in May off the coast of Forster, 220 kilometres (137 miles) north of Sydney.