Fire and Emergency New Zealand said the cause of the fire, which occurred about 5pm at the home in Nuggets Rd, near Kaka Point in the Catlins, was unknown, but it had caused "substantial damage'' to the property.
The fire had been extinguished by about 5.30pm, after crews from Kaka Point, Owaka and Balclutha attended.
Owner of the seaside crib Janice Wilkes, who was being comforted by neighbours nearby, praised fire crews for their prompt action, but said she feared many valuable items had been lost.
Mrs Wilkes said she had moved into the single-storey cottage permanently in 2000, and used the "picturesque'' location to inspire her art.
"I've got hundreds of watercolours inside. It's heartbreaking to even think about it.''
She could not confirm the cause of the fire, but said she first identified the smell of smoke about 4.45pm, just after extinguishing a candle in her living room.
"At first I thought it was the candle, but it soon became apparent it was coming from a spare room, which was full of smoke when I opened the door,'' she said.
"I just got out as quickly as possible and called the fire service.''
Mrs Wilkes said although the property was insured, nothing could compensate for the emotional value of what had been lost.
However, she voiced a small note of optimism.
"Sadly, one of my cats died a few days ago. But I saw the other one outside just now, so that's a huge relief.''
