More than 100 homes destroyed in Victorian bushfires

UPDATE: Authorities in Victoria say the number of homes lost in bushfires in the state is now 116.

Emergency services have confirmed that 98 homes have been lost in Wye River, while another 18 homes have been lost in Separation Creek.

Rescue crews are still assessing the fire zone and that number could rise further.

Both towns which are southwest of Melbourne, were evacuated on Friday afternoon. An emergency warning remains in place and both towns will be closed for the remainder of the day.

Power is out within the area and there are dangerous hazards including fallen domestic solar power lines, trees and damaged septic systems.

Premier Daniel Andrews told a press conference this morning the "complex fire" was expected to burn for days to come in "very bad country".

He praised Victorians for acting promptly and following expert advice.

"I do genuinely thank every Victorian who was issued a warning, followed it, heeded that advice and made a smart decision in their best interest and the interests of emergency services," he said.

"We’ve had no injuries, we’ve had no loss of life. This is really a very challenging fire but one in the planning and execution and, indeed, in terms of the outcomes, where no person has been harmed. That’s something we can be very proud of."

Emergency Management Commissioner Craig Lapsley said on Friday that the fire north of Wye River was the major concern and it was likely to go all summer.

"It's a lightning strike that started just under a week ago, and it's in exactly the wrong spot to have a fire," he said.

"It's a fire we'll have to work with during the summer."

Most residents of Lorne, Allenvale, North Lorne and Cumberland River evacuated their homes overnight after the nearby townships Wye River, Separation Creek, Kennett River and Grey River were evacuated on Friday afternoon.

Residents in Lorne and Allenvale were allowed to return home this morning.

The 2000-hectare fire continues to burn out of control but residents of Kennett River and Grey River had their warning downgraded to watch and act shortly before 1pm on Saturday.

Large bushfire at Wye River, taken Christmas Night. Source: AAP

More than 300 firefighters spent the night fighting the 2000-hectare Jamieson Track blaze that threatened to advance on Lorne.

Around 2am on Saturday the fire was about 10km to the southwest of Lorne, with a southwesterly change starting to push through, Emergency Management Victoria Incident Controller Peter West told AAP.

Mr West said some light and patchy rain had started to fall but more was expected across the fire ground through Saturday.

The main fire front had not gone through Kennett River, but firefighters defending homes there had put out spot fires and no properties had been reported burnt.

Fire burning along the Great Ocean Road on Christmas Day. Source: AAP

Mr West said the weather over the next few days was expected to be favourable for firefighting, with rain and lower temperatures.

Popular tourist town of Lorne was temporarily deserted. Source: AAP

Blazes near Ballarat and Wodonga destroyed 18 houses in the past week as Victoria deals with extreme temperatures and strong winds.