A record summer in Sydney and a series of early-season heatwaves helped make 2017 the city's thirstiest year since 2004, Sydney Water said.
The results come as the city braces for another burst of heat this week, with the mercury set to climb to 37 degrees on Sunday. The searing temperatures will be even worse in the west, with Bureau of Meteorology forecasting 41 and 45 degrees in Penrith for Saturday and Sunday, respectively.
Sydney's summer of 2016-17 was almost 3 degrees above average for mean temperatures, breaking a high mark set in 1990. This summer also got off to a warm start, with December expected to be among its four warmest in records going back to 1858.
Across the year, average daily water demand for Sydney was 1.587 billion litres, or 14 per cent higher than the 10-year average, Sydney Water said.
In December alone, average daily water use crept 1.9 per cent higher than the same month a year earlier to 1.744 billion litres. That demand was almost 50 per cent more than the long-run average for December.
Along with exceptionally hot weather pushing up water demand last January and February, the city also endured a lengthy dry spell from July to September, Robert Ius, Sydney Water's Hydraulics Operation Manager, said.
The city's rain gauge registered just 0.2 millimetres in September, the lowest for that month and the second lowest for any month in Sydney's history.
Average dam levels are running at just under 82 per cent. The city's biggest dam, Warragamba, is at 83.3 per cent full as of Tuesday, down from 92.1 per cent a year ago, according to WaterNSW.
Sydney's demand for water would be much higher - and dam levels much lower - given its swelling population if not for reduced per capita use over the decades.
"The current average daily water use per person per day is running at 315 litres," Mr Ius said. "This personal use per day figure is the same as it was in the 1940s."
Total water use by Sydney's 4.8 million residents and businesses was about 588 billion litres for the year to June 30, 2017, or about the same as in 2003-04. The population had risen about one-fifth since then, he said.
With another hot spell on the way, Sydney was urging residents to make appropriate use of water.
"It's important to keep well-hydrated during the hot weather," Peter Hadfield, Sydney Water spokesman, said.
"However, water is a valuable resource and we need to make sure that we don't waste it."
While residents may be keen to water gardens during the heatwave, doing so in the mornings or evenings would help reduce evaporation, he said.
Residents could also avoid unnecessary water use by adding a 7.5-centimetre layer of organic mulch to help keep soils moist.
Similarly, sweeping or raking driveways and paths rather than using a hose would save on water and water bills, Sydney Water said.
The city's water use has remained relatively stable since drought restrictions were lifted and replaced by Water Wise Rules in June 2009.
Water-saving measures have included greater use of water-efficient appliances and dual-flush toilets, and increased use of water from alternative sources such as rainwater tanks or recycled water, Sydney Water said.