I have just done a very quick google - most of these shops I have been to and the first three are within a "shortish" distance from the uni. The rest radiate out from Sydney in several directions. Hobbysew has shops around various areas. Most of the shops are on bus/train routes.
http://www.patchworkfabrics.com.au/
http://www.quiltsmith.com.au/
http://www.calicoandivy.com/
http://www.materialobsession.typepad.com/
http://www.hobbysew.com/
http://www.craftdepot.com.au/
http://www.thimblelady.com/
If I think of anymore I will put them up also.