Five major blazes were burning across the state of New South Wales, fanned by high, erratic winds in unseasonably warm 34 degree Celsius (93 Fahrenheit) weather, as infernos in the Blue Mountains west of Sydney plunged the city into an eerie, ash-flecked darkness.
"We are unclear yet as to how many properties have been lost, but it's expected by the time we finish counting, it will be at least in the hundreds," said NSW state Premier Barry O'Farrell.
In total, 95 fires were being tackled across the state with 34 out of control.
NSW Rural Fire Service Commissioner Shane Fitzsimmons said it had been a "very difficult and dangerous day" of "extraordinary fire behaviour", with blazes travelling vast distances due to the winds.
"This is as bad as it gets, you're talking destructive, damaging, and people losing everything they own," he told reporters, adding that it could be weeks before the fires were fully under control.
"We will be counting the toll of this tomorrow and indeed days to come, as far as the real impact on this fire," he said.
"We will be very lucky if we haven't lost at least a couple of hundred homes. The real fear, of course, is that there would be someone in them."
Springwood man Joe Moore told Sky News his house had been razed while an estimated 40 other homess had been lost in the village, though that figure could not be confirmed by officials.
"It's one of those things, if you want to live up in the Blue Mountains it's a beautiful place to live, but it has the dangers of nature's ferocity like we had today."
The blaze was believed to have started when a power line came down in strong winds, according to media reports.
Sydney health authorities issued a respiratory alert after a blanket of smoke settled over the city, bathing familiar landmarks including the Opera House and Bondi Beach in an otherworldly amber hue and causing ash to rain from the skies.
The worst firestorm in recent years devastated southern Victoria state in 2009, razing thousands of homes and killing 173 people.