The Bourke St fire was reported to emergency services at 3.30am yesterday.
A Fire and Emergency New Zealand spokeswoman said crews from Waikouaiti and Palmerston found the wooden home "well alight" when they arrived and requested additional resources to fight the blaze.
They were joined by crews from Willowbank and Waitati.
The home suffered "extensive damage," the spokeswoman said.
Nobody was home at the time of the fire.
A fire investigator was working to establish a cause, she said.
A police spokesman said the Criminal Investigation Branch visited the site and the fire was being treated as suspicious.
When the Otago Daily Times arrived at the scene yesterday, several police officers were investigating the remains.
The neighbour who called emergency services said the fire appeared to have been deliberately lit.
She saw an unnatural trail of flames head from outside the house towards the building.
The owner of the house was in Auckland at the time and was due back later in the day.
Two cats were kept at the property.
One cat died in the blaze and the second cat was still missing, the neighbour said.
