The fire, which started about 8.30pm, quickly engulfed the building and threatened others close by.
Neighbours were alerted to the emergency by screaming and quickly showed up to see if they could help, but the fire was too well advanced.
Heat from the blaze could be felt 30 metres away and the pungent smoke stung the eyes of those watching.
Occupants of houses next to the property turned hoses on to their facing walls and roofs as embers were blown about by the wind.
Smoke and a wall of orange-red flame reached high into the night sky, setting palm trees ablaze and threatening to spread the fire further.
CI News senior journalist Richard Moore, who lives in a nearby property and was amongst those first on the scene, said it was fortunate earlier strong winds had eased otherwise the situation could have got out of hand.
He said it was reminiscent of an Australian bush fire, where strong winds could fan a blaze into an unstoppable inferno within minutes.
Some occupants in the nearby Atupa Orchid Motel packed valuables into crates in case they needed to make a fast exit from the area.
Police blocked off the back road and as fire engines began to arrive they were directed through the dark, smoke-filled night to scene of the fires.
Fire Rescue Service units sped to the scene from around the island – including the airport, Takitumu and Puaikura – with about six attending all up.
Water was a problem and on two occasions units had to leave to refill their tanks.
No-one was hurt in the blaze. There were no people in the house when the fire started. It is understood the family living in the house had earlier left to visit another part of the island.
The blaze also claimed a new car and a motorbike that were parked nearby.
- Richard Moore/CI News