Residents of Rosetta Place said they were awoken about 4am by the sound of barking dogs and the flashing lights of a fire truck.

Although the property had been unoccupied, a neighbour said he regularly saw people coming and going, it was not the first time a fire had been deliberately lit.

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"The house has been empty since we moved in but you always saw people hanging about," he said

"A couple of months ago, I'd seen some kids [at the property] and they looked suspicious so I kept an eye on things," he said.

"Once they ran off I noticed smoke in the undergrowth, so I ran over and stamped it out before it could spread."

Another neighbour said it was devastating that a house had been destroyed in the midst of Tasmania's housing crisis.

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"So many people don't even have a home and look at this," she said

"It's just such a waste."

A Tasmania Police spokesperson said initial investigations indicated the fire appeared to have been deliberately lit, which caused "significant structural damage".

The spokesperson said anyone with information is asked to contact police on 131 444 or Crime Stoppers on 1800 333 000.

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