More than 200 homes have burned down in deadly bushfires racing along the Australian coast.

At least 43 homes were destroyed in East Gippsland, Victoria, while another 200 were lost in New South Wales.

On Tuesday, thousands of people who were unable to evacuate fled to beaches as fires encircled their towns.

Conditions have eased slightly, and a major road that was closed in Victoria was reopened for two hours on Wednesday to allow people to leave.

But in the early hours of New Year's Day, there were still 112 fires burning in New South Wales alone.

In Victoria, there were 45 bushfire warnings with one emergency - later downgraded to a "watch and act" warning.

New South Wales Premier Gladys Berejiklian said workers would take advantage of the milder weather to clear roads and restore power.

But she said temperatures were expected to rise again on Saturday.

"At the very least, weather conditions will be at least as bad as what they were yesterday," she said.

The fires have killed at least three people in her state in recent days.

A 63-year-old man and his 29-year-old son died after staying behind to defend their home and farm equipment, police said.

Another man was found in burnt-out car in the early hours of New Year's Day, bringing the total of fire-related deaths across Australia this season to 13.

The fire service warned they had been unable to reach some people in remote areas.

"We've got reports of injuries and burn injuries to members of the public," said New South Wales rural fire commissioner Shane Fitzsimmons.

"We haven't been able to get access via roads or via aircraft - it's been socked in [runways have been closed] or too dangerous."

Mallacoota in Victoria was one of the worst-affected towns. A reporter for 9 News said homes on the outskirts had been levelled and were "still smouldering" on Wednesday.

The worst of the fire has passed the town, but many people spent the night sleeping in their cars or on deck chairs in the open. Others took refuge in the cinema or the main hall.

Victoria Emergency Commissioner Andrew Crisp said "a large barge" was sailing from Melbourne to Mallacoota with food, water and 30,000 litres of fuel.

Up the coast in Ulladulla, New South Wales, cuts to mobile networks and landlines meant people were queuing to use payphones.

On Tuesday, the Australian government said the military would send extra planes, helicopters and boats to help the emergency services in New South Wales and Victoria.

The military said amphibious ships were setting off from Sydney and would arrive in fire-hit coastal areas of New South Wales and Victoria by Friday.

Meanwhile, a woman from Mallacoota who took a photo that went viral has spoken about the image.

Allison Marion took the picture of her 11-year-old son, Finn, driving their family to safety in a powerboat.

"Finn drove the boat and my other son looked after the dog in the boat and [I am] very proud of both of them," she told ABC News.

When the family returned to land, as conditions eased, they went to check on their home.

"Our street somehow escaped the fire somehow," she said. "However, I feel for many people in our community who have lost their homes. It's just truly saddening."