Hundreds of firefighters battled the inferno outside the wheat-farming town of Toodyay, 80 kilometres (50 miles) from the Western Australian capital Perth, apparently sparked when power lines collapsed amid searing heat and high winds.

Local resident Beverley Phillips, who fled by car with just her pet poodle and cat, described driving through thick smoke to reach safety.

"I jumped in the car and drove as fast as I could, but it was dangerous. I felt I could have gone into a culvert or a tree at any time," Australian news agency AAP quoted her as saying.

"It's all I have -- the car, the dog and the cat," said the 58-year-old, standing by her car, struggling to take in her loss. "All those photos of my daughter when she was a baby, of my mother... the beautiful garden."

State Premier Colin Barnett designated the blaze a natural disaster, enabling the release of emergency funds, as he visited the area.

"This is a devastating fire with great destruction," he told reporters, adding that the needy would receive a 3,000 dollar (2,675 US dollar) hand-out.

"I want to express my sympathy to those who have lost their homes, over 30 houses destroyed by a very severe, very intense bushfire in the surrounding area of Toodyay."

Some 37 homes along with sheds, outhouses and livestock were engulfed by the fire, which swept through more than 3,000 hectares (7,400 acres) of land in the sparsely populated farming community.

Images from the scene showed burnt out buildings, cars, bicycles and scorched trees dotting the arid landscape.

Three firefighters were treated for smoke inhalation and dehydration and one resident had minor injuries, the Fire and Emergency Services Authority (FESA) said.

Police said falling power lines had sparked the fire, AAP reported.

"I'd like to acknowledge the efforts of firefighters and the police and the Shire of Toodyay," Barnett said. "There's no doubt they saved lives last night."

Another resident, artist and writer Caroline Coate, described a "roaring bonfire" that descended on her property, consuming her home and art work.

"You've got no idea how bad it was.... There are people out there with livestock standing dead on their feet," she told AAP.

The extreme heat and strong winds of the past few days have disappeared and residents would likely be able to return to their homes on Thursday, Fire and Emergency Services Authority (FESA) spokesman Bruce Chamberlain said.

"Crews have been working through the night and blacking out and if all goes well, after further inspections, residents will go back into their properties," Chamberlain told AAP Thursday.

"All things being equal, after mopping up, local government will take over and we will withdraw at the end of business today."

A second major fire in Badgingarra, about 160 kilometres north of Perth, had burned through some 10,500 hectares of land, although no homes were lost.

Australia is still recovering from Black Saturday, when more than 2,000 homes were lost in the state of Victoria in the country's worst natural disaster of modern times.

Officials credited a new fire warning system -- aimed at encouraging people to leave their homes rather than try to fight the flames -- with saving lives in Toodyay.

Australians are bracing for another horror bushfire season after one of the warmest winters on record and following a decade-long drought in parts of the country.

Parts of Western Australia's Goldfields region were given the top-level "catastrophic" fire danger rating on Wednesday, while Tasmanian state authorities imposed a ban on lighting fires.

Scores of fires have broken out across the country since August, with more than 20 homes lost. A firefighter collapsed and died in New South Wales in October after helping put out a grass blaze.

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