There are reports a massive bushfire has affected properties in Menai and Barden Ridge in Sydney's south-west, New South Wales fire crews say, as the threat eases to watch and act status.

Key points: Police are investigating to try and find out what started the fire

Police are investigating to try and find out what started the fire Bushfire was downgraded overnight, and has now been downgraded again after reaching emergency level on Sunday

Bushfire was downgraded overnight, and has now been downgraded again after reaching emergency level on Sunday More than 500 firefighters in almost 100 fire trucks, along with 15 aircraft, have battled the blaze

The NSW Rural Fire Service (RFS) said the level of damage and the number of properties could not be confirmed, but said the fire had burnt over 2,430 hectares around Holsworthy and Menai.

The RFS has downgraded the bushfire to "watch and act", replacing the emergency warning which was reissued earlier for the large blaze near the Holsworthy region.

The RFS said large numbers of firefighters would take advantage of the easing conditions and work into the night to bring the fire under control.

However, residents in Sandy Point, Pleasure Point, Voyager Point, Alfords Point, Barden Ridge, Illawong, Menai and Bangor are being warned to keep a close eye on the situation.

More than 500 firefighters in almost 100 fire trucks, along with 15 aircraft, battled the blaze throughout the day and residents fought off ember attacks.

Plumes of smoke engulf Wattle Grove in Sydney's south-west. ( ABC News: Avani Dias )

The Bureau of Meteorology [BoM] said winds had eased from 25 to 35 kilometres per hour down to 15 to 25kph.

A firefighter tackles the blaze on Saturday. ( Twitter: @NSWRFS )

The blaze, which has been burning since Saturday, was downgraded from emergency to watch-and-act status overnight, but flared up again on Sunday.

One Menai resident, Erin Stevens, left her home on Saturday evening.

"It was confronting watching those red flames come down the valley, but we've been through this a few times before over the years so everyone's very well prepared," she said.

"They know what's going to happen and we have full faith in the fire crews."

NSW Police have launched an investigation into the cause of the fire and are appealing for witnesses.

Sorry, this video has expired 'If it's not their house, it's my house': Neighbours defend homes from fire

'Unseasonably hot' weather turning bushland into tinderbox

Prime Minister Malcolm Turnbull addressed media at the Heathcote Fire Control Centre on Sunday afternoon, commending firefighters and volunteers for their "extraordinary courage and professionalism".

He said it had been "unseasonably hot".

"That is a matter of obviously of great concern but we have to deal with the worst that Mother Nature can throw at us and the worst Australians are presented with," he said.

NSW RFS Commissioner Shane Fitzsimmons said the unseasonal heat was sucking "the moisture out of the vegetation", making it highly susceptible to ignition.

"It will be a tough week for firefighters because unfortunately what we really need is a meaningful rain right across this fire ground and right across other parts of NSW," he said.

Sorry, this video has expired Aerial views show bushfire burning in south-west Sydney

Locals donating food to keep firefighters going

More than 200 people visited an emergency centre at Moorebank Sports Club overnight, with local hotels offering accommodation to residents unable to return to their homes.

Liverpool Council chief executive Kirsten Fishburn said locals had come together to help.

"I've seen people offer up their houses, their beds, to babysit kids, to look after injured reptiles. Anything the community needs, people have offered up their hands to deliver it," she said.

Local businesses have also donated food and water to firefighters.

Woolworths has donated food and water to keep firefighters fed while they work to contain the blaze in south-west Sydney. ( Facebook: Anastasia Rose )

Coles and Woolworths each filled several trolleys with supplies, while Gary's Seafood in Menai gave away free fish and chips to all firefighters on Sunday.

Firefighters paused to eat at a sausage sizzle to keep them fuelled.

Firefighters in Menai pause to fuel themselves with sausage sizzle sandwiches. ( ABC News: Mark Reddie )

Kirrawee Vet, which offered 48 hours of free boarding for animals belonging to people trying to defend their property, is at capacity.

Earlier in Alfords Point, residents reported that winds picked up and some experienced power outages.

Winds of up to 40 kilometres per hour made it difficult to contain the blaze.

This map shows how close the fire got to homes around Menai. ( Twitter: @NSWRFS )

"We've got a lot of work ahead of us and some strong winds dominating the system today which are going to prove very problematic for the firefighters and all those people in and around this fire ground area," Commissioner Fitzsimmons said.

People in Illawong, Bangor and Picnic Point were warned of spot fires.

On Saturday, the NSW RFS rescued a koala in the Liverpool Military Area in Holsworthy.

A koala was rescued from the bushfire by the NSW Rural Fire Service in the Liverpool Military Area in Holsworthy.

The blaze started on Saturday afternoon at Moorebank and burnt in a south-easterly direction through the Holsworthy army base and around Heathcote Road.

However, as the night wore on it changed direction, meaning new areas were threatened.

Sorry, this video has expired Bushfire burns over 1,000 hectares in south-west Sydney

Heathcote Road had been a de facto last line of defence for some residential areas, but the RFS announced at about 8:00pm that the fire had jumped it.

The fire burnt through bushland too dense for crews to access, and a line of fire trucks 4 kilometres long had been positioned on Heathcote Road in an effort to stop it.

Train services have resumed on the T8 Airport and South Line in both directions, but passengers are being warned to allow extra travel time and listen carefully to announcements.

Non-essential personnel were evacuated from the Holsworthy army base, where the munitions store was successfully defended.