The top floor of a recently renovated 1928 wooden house in Cameron Lane on Napier Hill was gutted by a fire which neighbours said spread "frighteningly" fast.
Firefighters began getting calls to the fire around 10.30am as it effectively brought traffic and pedestrians to a halt in Tennyson St below.
Flames could be seen pouring out the windows and through the roof and a huge pall of dark smoke rose into the sky.
Hundreds of people stopped and watched it unfold from below.
The top part of the house had been occupied for the past year by two young women - one with a small daughter who was at school at the time.