
The cottage in Cromer St was destroyed during the blaze, which began about 7.30pm.
A neighbour said he and his family were alerted to the emergency by residents across the road, as they could not see or hear the flames from their room on the far side of their home.
The neighbour, who did not wish to be named, said he, his wife and their 1-year-old quickly left the house when they realised the extent of the blaze.
"There were a lot of flames and banging, and one of our living room windows became cracked from the heat," he said.
"I quickly moved my car from the carport, or it could easily have been damaged."
He said firefighters had "worked miracles" to save the family home.
"We’re very grateful for how quickly they were on scene and the work they did to save our home," the neighbour said.
"Luckily, the wind was in a good direction, or it might have been a different story."
He said a father and child were sometimes present at the property, although they seemed to be out on the night in question.
"Nobody was hurt, which is a relief."
Balclutha fire chief Jason Lyall said a member of his crew had driven past the blaze on his way home and quickly alerted the Kaitangata brigade also to turn out.
"As a result, we’ve had a good combined crew on scene very quickly and [have] been able to prevent damage to neighbouring property," he said.
"The house was fully involved when we arrived and we had maybe 25 firefighters working to put it out at the peak."
He said emergency personnel left the scene about 10.30pm.
A fire investigator was due to inspect the property yesterday.
Mr Lyall said the fire was not being treated as suspicious.