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Contractors working on a property nearby raised the alarm.
Fire and Emergency New Zealand volunteer fire crews from Wanaka, Lake Hawea and Luggate were called to a fire about 11.20am in a non-mobile house bus used as a dwelling on an access road through a rural property on Domain Rd, Lake Hawea.
Fire and Emergency acting shift manager Ian Littlejohn said the first fire appliance to arrive reported the structure as ''a total loss'' but was unable to confirm whether the occupant was inside.
Four low-pressure delivery hoses were used to put out the fire and police and ambulance personnel were present.
Police later issued a statement saying fire officers had located ''possible human remains within the dwelling, however, this is yet to be confirmed by a forensic pathologist''.
Beekeeper Peter Ward owns one of the three farms accessed by the dirt road next to which the dwelling was located and described the occupant as a ''nice old guy'' who used to read a lot.
''He was a bit of a recluse, but he loved Hawea and loved the mountains.''
He said he had become known locally for riding in and out of Wanaka every day on his electric bike.
Mr Ward said the man was originally from Scotland and had an accent ''so heavy you could hardly understand him'', and had been in the British army and served in Northern Ireland.
He had arrived in New Zealand about 40 or 50 years ago and worked in the orchards in Cromwell before retiring to Lake Hawea.
Mr Ward said the community built him his house about 10 years ago and ''donated quite a lot of things to him''.
He said ''the shack was well insulated, with a wetback, but had no power. Solar panels on the roof provided enough power for his TV set.''
Fenz officer Ian Littlejohn said after fire crews contained the fire they ''backed up the structure to preserve the scene''.
Police and Fenz will carry out a scene examination this morning.
A specialist fire investigator was at the scene yesterday to determine the cause of the fire.