The latest report from the Rural Fire Service is that the fire has been downgraded from an emergency warning to a "watch and act".
The fire has crossed Nords Wharf Rd, however the threat to properties in Nords Wharf, Cams Wharf, Catherine Hill Bay, Gwandalan, Summerland Point and Lake Munmorah has eased.
The fire flared up yesterday in the north Doyalson area, increasing in intensity and travelling quickly towards the towns of Chain Valley Bay, Nords Wharf, Cams Wharf, Murrays Beach and the heritage village of Catherine Hill Bay.
Stuart O'Keefe from Fire Rescue NSW says the fire, which originally started a fortnight ago due to a coal seam burning near the surface, produced flames up to 40m high and spotted over the Pacific Highway into the Munmorah State Conservation Area.
During the night he says the fire ran very quickly, and firefighters couldn't contain the western side near Nords Wharf.
Residents were advised to leave and many evacuated in the early evening, before returning later in the night and having to leave again.
With the fire still active and properties under threat they have not yet been allowed to return to their homes, with many spending the night in either Belmont or Swansea.
It's been confirmed Wallarah House, built in 1887 for a mine manager and worth an estimated $2million, has been destroyed.
Local resident Wayne DeMarco told 1233 ABC Newcastle's Philip Clarke he saw the damage for himself when he returned home briefly at around midnight.
"We saw a very large firestorm," Wayne says. "We had to leave, we were evacuated."
Wayne says when he returned around midnight firefighters had protected most of the town, but says the fire was "unbelievable".
"Wallarah House was burnt, jetty masters' quarters which is also near Wallarah House, the jetty itself was burning last night as I left," he says.
"And it looked like there may have been some other properties and houses also burning."
The iconic "Catho Pub", while singed, is still standing but Wayne says he knows of three homes that were lost, with reports of up to six properties destroyed in the town.
"The whole valley is burned, so there will be some pretty big damage when we can see it in the light of day today," he says.
With more than 1500ha of scrub and bush burnt so far, the fire continues to burn out of control around Doyalson North, Swansea, Cams Wharf, Murrays Beach, Caves Beach and Catherine Hill Bay.
More than 170 firefighters are on scene, supported by aircraft. They are back-burning where possible, and warn residents will see an increase in fire and smoke while that is happening.
The RFS advises that homes can offer safety, conditions may be changing, and residents should continue to monitor the situation and follow their Bushfire Survival Plan.
Evacuation centres have been set up at Doyalson RSL and Swansea RSL clubs.
Public schools in the area between Nords Wharf and Lake Munmorah are closed. (you can find a full list on the RFS website)
There are major road closures both in Lake Macquarie and the Port Stephens area, where the Heatherbrae fire is still burning out of control but is now at "watch and act" rather than emergency level.
The Pacific Highway remains closed between Swansea and Lake Munmorah, although Swansea Bridge is open.
Richardson Rd at Raymond Terrace is closed, as is Masonite Rd, Cabbage Tree Rd and Tomago Rd.
Find full details of road closures, which can change at short notice, here.
Because of the Pacific Highway closure, bus passengers can use their tickets on NSW Trains between Wyong and Newcastle.
For full public transport information, you can call 131 500.
The fire which began in Hank St, Heatherbrae, has burnt out 3500ha of bushland, with more than 100 firefighters working to protect properties.
It's still very active and burning around Lisadell Rd, however residents from Salt Ash, Fullerton Cove and Nelson Bay Rd have been allowed to return home.
In the Upper Hunter, the Hungerford Creek fire in the Muswellbrook area is now at watch and act level after burning more than 8000ha, but remains out of control.
Property protection is underway in Martindale Valley, Horseshoe Creek and Kings Creek, and residents in the area have been warned to watch out for spot fires and ember attack ahead of the main fire front.
Hundreds of homes throughout the lower Hunter and Central Coast remain without power, including Catherine Hill Bay, where there's been major damage to the electricity network with poles destroyed.
In Raymond Terrace, parts of the underground power network were completely melted.
If lives are at risk, the RFS advises you to call triple-zero immediately.
Stay up to date with the fire situation by listening to your local emergency broadcaster, 1233 ABC Newcastle, checking the RFS website or calling the Bushfire Information Line on 1800 679 737.
If you are concerned about the welfare of family and friends, you can contact the Police Information Centre on 1800 227 228.
You can also check 1233's Facebook page and follow us on Twitter @1233Newcastle.
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