The latest pictures from the scene show a burnt out building and a ute destroyed by the blaze.

There are unconfirmed reports that two other homes have also been damaged.

Local man Dion Pisconeri spent the night fighting the fire as the flames roared up to the front door of his Elliott Street home.

"By midnight it was roaring down the hill towards my place," he said.

"Soon it was at my doorstep and me and my neighbours are fighting it because my house was the first in line and we thought if we could beat it here we could save the rest of the houses,"

The 33-year-old built his house just nine months ago. He and his neighbours fought the blaze using buckets of water, rakes and a ute with a water pump on the back.

"We spent 8 hours solid fighting the fire, wetting down the house and tackling spot firesputting out spot fires and wetting down the house," Mr Pisconeri said.

Around 150 career and volunteer fire fighters are battling the blaze on the ground supported by aerial waterbombers.

At 8am on Sunday, the Department of Fire and Emergency Services said the fire is controlled at this stage, but is still burning around the townsite.

There is no threat to lives or homes but there is a lot of smoke in the area.

Although there is no immediate danger you need to be aware and keep up-to-date in case the situation changes.

There are also power problems in the area.  At least ten power poles have been burnt down. Western Power says 28 customers are without electricity due to the fire.

South West Highway is closed between the intersection of Mayfield Road to the north of Waroona and Willowdale Road to the south. Vehicle control points are in place and the South West Highway is closed to all traffic entering Waroona although vehicles can still leave the area.

Earlier on Friday evening the alert level was downgraded to a watch and act advice after the fire was contained, but it later broke containment lines.

The bushfire was first reported at 2.30am on January 29. So far it has burnt through 325 hectares.

A community meeting is being held at 9am on Sunday at the Waroona Memorial Town Hall, located on South Western Highway near the Town Oval.