Two planes flying over a Sydney housing estate clipped at 100 ft, sending one crashing into a home and killing the two people on board.

While neighbours mowed lawns and children played nearby, the aircraft dropped "like a brick", destroying the rear of the house at 14 Arnold Ave, Green Valley.

Residents ran for cover as aviation fuel gushed from the wrecked plane, then engine of which had broken off and landed in the backyard.

The second aircraft, a Piper Cherokee Archer, crash-landed at nearby Hoxton Park airport, where its pilot, Ian Campbell, walked away unhurt.

But a man and a woman, both in their 50s, inside the two-seater Piper Tomahawk were killed instantly.

Miraculously, no one was inside the home at the time. A neighbour said the owners were on holidays...

Residents around the crash site, in Sydney's south-west, were evacuated in case the wreck exploded.

Barry Sargeant, Sydney manager of the Bureau of Air Safety Investigation, said he did not know how the two planes hit.

But he said they collided just east of the airport at about 1000 feet.

"The Tomahawk has apparently suffered from major structural damage, causing a loss of control", he said.

Mr Sargeant said the plane then plunged steeply, landing on the house.

"Certainly, the weather conditions were very good, there was not obstruction to vision," he said.

"How they both did not see each other is a bit of a mystery"

...

Fire Brigade Superintendent John Bowles said the plane was "totally destroyed". The engine was found five metres away from the fuselage wreckage in the backyard.

"It's a miracle that the aircraft dropped onto one house and not a couple, and that there has been no fire," Supt Bowles said.

"It's aviation fuel, so it is very flammable and if it had exploded, it could have ignited the entire house and possibly the houses around it"

"We thought it was aiming right for us," said Lam Ho, 14, "I'm so happy that I'm alive now, because I thought I was gone".

Two people on board the light plane were killed when it crashed through the roof and into a rear room of the house at 16 Arnold Avenue, Green Valley...

The Ho family said 10 to 15 children, many aged under 10, and about six adults, were in the Ho house and backyard at the time, preparing for the party.

Lam Ho was in the kitchen of her mother's house when the plane crashed less than 15 metres from her.

"We all cried and I ran," she said. Her house is behind the house where the plane fell...

The accident has prompted State MP for Liverpool, Paul Lynch, to call for closure of the airport. The aerodrome did not have a control tower.