The man, who neighbours believed was in his 30s, was the sole occupant of the Caledonian Rd house when the fire started in the kitchen just before 7pm.
He made it out before flames spread to the rest of the house and was checked by St John officers.
Neighbours said the man had moved from Christchurch to Oamaru within the past two months and was renting the two-bedroom house.
They believed he had moved south after the earthquakes in Christchurch.
One neighbour said the man had gone into the kitchen and turned on a ring on the stove to heat soup, which another neighbour had given him. He then went out, closed the kitchen door and sat in the living room.
Shortly after, he heard a bang and when he opened the door to the kitchen it was on fire. He left the house as flames quickly spread into the adjacent living room and then the rest of the house.
Several neighbours called the Oamaru Fire Brigade, with two units and about 15 firefighters arriving just before 7pm.
Chief Fire Officer Steve Couper said, when they arrived, the whole house was alight.
Firefighters had to use breathing apparatus to get into the house.
An hour later, smoke was still pouring from the windows.
Mr Couper said firefighters spent a couple of hours dampening hot spots and these would be monitored throughout the night to ensure none flared.
He estimated about 90% of the house had been damaged by flames and smoke.
