The unit at Merrys Lane, South Launceston, was vacant at the time of the fire.

The fire caused about $100,000 damage.

Launceston CIB Detective Sergeant Joe Riley said police believe there were witnesses that could provide helpful information to their investigation.

"There are people who were in the vicinity of the fire prior to the ambulance attending," he said.

"There were bystanders watching what was occurring. I'd urge those people, if they could, to contact police."

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The fire was lit from inside the building.

It caused damage to the surrounding units, which were also unoccupied.

Police are investigating if there were squatters in the vacant unit.

"The premises had been vacant for some time there is the possibility that squatters had been coming and going," he said.

"One of the avenues we will be looking at is to see if the fire was targeted."

Detective Sergeant Riley expressed his disappointment that another public housing property had gone up in flames.

"It is disappointing, obviously these homes are valuable and they are required for people to occupy," he said.

"Any time a premises that could be used by the public is damaged, it's very disappointing to see."

The blaze occurred about 7.20pm on Sunday.

Emergency services were notified when a neighbour noticed smoke coming from the residence.

Information can be provided anonymously to Crime Stoppers on 1800 333 000.

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