Detective Sergeant Mark McCloy, of Invercargill, confirmed today the second person had been located.
“A specialist search team has located a second person deceased following a house fire on View St in Manapouri,” he said in a statement.
Det Sgt McCloy said a methodical investigation had been under way to account for the occupants, and they were still working to determine whether anyone else was inside the house at the time of the fire.
"The thoughts of everyone involved are with the victims’ whanau, who are being supported at this tragic time," he said.
It comes after one person was confirmed dead yesterday following the early morning fire.
The news of the initial death shocked the close-knit community.
Police last night said people also remained unaccounted for, many hours after the two-bedroom home in View St had been razed.
The fire started about 3.40am yesterday and police said this morning they were still treating its cause as unexplained.
Fiordland Community Board chairwoman Diane Holmes said the community was upset.
"They just want to pull together and see what they can do to help," she said.
"It’s very sad. People are just in shock."
Ms Holmes was unsure of the circumstances of the blaze, but said the community was amazing about coming together to look after one another.
"There will be a lot of care," she said.
Fire investigators and Invercargill CIB were at the property for most of the day to piece together what had happened.
Det Sgt McCloy yesterday said police would work alongside Fire and Emergency New Zealand to complete a scene examination and inquiries in the coming days.
One neighbour said Manapouri’s volunteer siren, located metres from his home, woke him at 3.58am.
"Normally when the siren goes off I go back to sleep, but about 6 to 7 minutes later I heard banging outside.
"Then my bedroom lit up bloody orange."
His bedroom was at the back of his house, but the glow from the fire reflected into it off his neighbour’s windows, he said.
It took him a little while to work out it was not his immediate neighbour’s house on fire.
Firefighters were already battling the blaze when he went to investigate.
"I think there must’ve been gas bottles or something because there were some loud explosions and then smaller explosions like ammunition.
"I don’t know what it was, but it was certainly going off."
Manapouri sits on the fringe of Fiordland’s national park and has about 100 homes.
The neighbourhood has a mix of long-term residents in their homes or rental properties, as well as holiday homes and Airbnb rental properties.
— Additional reporting Grant Miller
