A Fire and Emergency New Zealand spokeswoman said emergency services were alerted to the fire in Waimea Ave, Calton Hill about 12.40pm, and said the house was "well ablaze".
Four people were inside the two adjoining units and all made it outside, a witness at the scene said.
"Initially, it was reported that there might be somebody in the house.
"We responded with trucks from Lookout Point and St Kilda.
"The house was well ablaze and so we have called in two further fire trucks to assist, from Roslyn and Dunedin City stations."
She said there had not been any reports of injuries, and firefighters were still working to contain the blaze at the moment.
It was still too early to say what may have caused the fire, she said.
A St John Ambulance spokesman said one person was treated at the scene for minor injuries.
