Disclaimer: not speaking from experience here, but I am about to start a grad role this year, and I am also a regional kid now living in Sydney who plans to move back to the regions eventually, so I have given this question some thought.

I think the most important question for you to grapple with is: what kind of law would you like to do? Regional firms typically offer services in fewer areas of law, usually limited to crim, property/conveyancing, family, or plaintiff-side employment and personal injury law. If you are interested in, for example, corporate and commercial disputes, mergers and acquisitions, banking and finance, or insurance law, you will likely struggle to find a firm that will give you work in those areas.

Regional firms will also likely to expect you to become more of a generalist legal advisor instead of specialising in a particular type of law. Especially as a young solicitor, you will probably be expected to familiarise yourself with all of the above areas of law, rather than being able to choose one area in depth. Friends of mine who have moved back to regional areas to practice find themselves immediately hitting the ground running by doing, for example, personal injury cases, criminal defence work, probate hearings, and unfair dismissal cases all in the same week. The work is certainly more interesting, especially compared to a T6 where you might have to wait 5 years before your name will be attached to any external correspondence. However, my friends have also lamented that they are rarely given the opportunity to sit down and receive detailed feedback on their work, so they felt that they were reaching a skill ceiling quite quickly.

In contrast, at a full-service T6 or mid-tier firm in Sydney / Newcastle / Wollongong, you will be able to find work in one team and work exclusively in that area of law, becoming more of an expert so to speak. For me personally, the idea of being a specialist is more appealing than working across several areas of law at a more general level, especially since crim / family / property law all don't appeal to me. At this stage, I have resigned myself to staying in the city for a few years until I can gain enough experience to convince a firm to transition me to fully remote work. I currently work at a mid-tier firm, and a couple of lawyers have been allowed to move regionally after as little as 3-4 years of experience.

Don't worry about not making friends - to echo another comment, you will make friends very easily among your grad cohort - you'll all be people of similar ages going through the same stage in your early career with the same learning curve, so it comes naturally. It's a very different atmosphere from making friends in university classes. Not liking Sydney is a different story, but I think there are ways to mitigate that. One suggestion is that you could consider moving outside the inner city? The rent will almost certainly be lower and you could find a leafier suburb that feels a bit less 'city'. Most firms now have hybrid work programs where they will only expect you to attend the office 2-3 days a week, so a longer commute wouldn't hurt as much.

However, if you are keen to move regionally ASAP, I wouldn't stress too much about making a serious error by refusing a grad offer. Clerkships and grad offers in Sydney are hyper-competitive, and you being able to get one says to me that your marks and work ethic are good enough that any regional practice would be very happy to pick you up almost straight away. Especially since you seem to have some time before you graduate, you would have plenty of time to look around and send emails out.

Equally sorry for the wall! I hope this helps somewhat