The upper level of the Weaver St property was badly damaged by the 1am blaze, despite the quick response of firefighters from the nearby Queenstown station.
A neighbour, who did not want to be named, said she was woken by the sound of a woman screaming ``Fire, fire, fire''.
She looked out to see flames enveloping the windows and roof of the house's upper storey.
Her daughter's partner called 111, and firefighters arrived at the house quickly.
She did not know the occupants of the house, but said there was a party there at the weekend and parties were held there on a regular basis.
An American tourist who also did not want to be named, said she heard a ``commotion'' and went to see what was happening.
She was staying at The Whistler apartments in Gorge Rd, which overlook the property.
``I heard screaming and then looked out. Then we went out on the porch and could see the smoke and the commotion.''
About 12 ``young adults'' were gathered at the bottom of Weaver St looking up at the fire, but she was unsure if they had been in the property.
``Then we saw the fire trucks.''
Seven crews from Queenstown, Frankton and Alexandra put out the blaze.
A Fire and Emergency New Zealand spokesman said no-one was injured in the fire, and it was not being treated as suspicious.
A fire investigator was examining the scene yesterday afternoon.
