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No-one was injured in the Newcastle St fire as the house was unoccupied at the time.
A Fire and Emergency New Zealand spokesman said two Alexandra crews and a crew from Clyde responded to calls at 5.45am.
A car at the property also caught fire, a Fenz spokesman said.
Clyde resident Sue Noble-Adams was at the scene and was one of the first people to alert emergency services.
"It went it up like nothing on earth," she said.
"Then the tyres starting blowing up on the vehicle parked in front of the house. They were going off like bombs. It was very scary."
The fire was extinguished at around 8am
The house was "extensively damaged as well as the car parked beside it" said a Fenz spokesman
Fire investigators were now at the scene and are working with the Clyde Fire Brigade "dampening down hot spots".