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Almost 120 bush and grass fires are burning across NSW, with 48 uncontained and more than 1750 firefighters in the field.
Firefighters on Monday rallied to save homes on the south coast as fierce winds fanned a fast-moving fire which quadrupled in size in less than two days.
The out-of-control fire at Currowan is burning across almost 25,000 hectares and is being pushed east towards coastal communities but tempered overnight as gusty northeasterly winds moderated.
RFS Commissioner Shane Fitzsimmons on Tuesday confirmed that properties west of Kioloa had been damaged and destroyed amid the blazes. Authorities would assess the extent of damage throughout the day.
The Currowan fire remains at "watch and act" alert level and evacuation centres have been set up at Ulladulla and Batemans Bay.
"We do have some early indications of property being lost or impacted to the west of the area of Kioloa, largely where the fire crossed the Clyde River there yesterday," Mr Fitzsimmons told the Seven Network.
"Unfortunately there's still a lot of very active fire edge on this fire, which is why it's remaining at watch-and-act alert level, and conditions could certainly change if we see the winds influence fire behaviour on that again."
In Sydney heavy smoke is again hanging over the city, with three large blazes on the city's fringe.
The haze blanketing the city is being blown from large bushfires in the Blue Mountains, near Warragamba Dam and in the Hawkesbury area.
Mr Fitzsimmons said a "temperature inversion" had trapped the smoke in the Sydney basin, prompting a "poor" air quality rating. Parts of southwest Sydney have also been deemed "hazardous".
"All those fires and some a little further afield are all impacting on the smoke inundation around the Sydney basin," Mr Fitzsimmons said.
"There's a general westerly pattern to a lot of these winds that's going to continue to bring smoke right across the Sydney basin, and if we get another inversion effect like we saw this morning, some of that will get trapped."
NSW Police on Monday expressed concerns about the number of people deliberately lighting fires amid increased risk.
Lake Illawarra Inspector Brian Pedersen said it was distressing to see people ignoring the warnings of emergency services.
Police spoke to three 12-year-old boys after two fires were deliberately lit in the Lake Illawarra region over the weekend.
"We are urging the whole community to be vigilant and report any suspicious behaviour," Insp Pedersen said in a statement.
Two million hectares of NSW land have been burnt since July in more than 7000 fires, with authorities dubbing it the "most challenging bushfire season ever".
Six people have died while at least 673 homes have been destroyed to date.
There are no total fire bans in place for Tuesday but there is a "very high" fire danger stretching along the NSW coast and in the state's north.