Neighbours told the Otago Daily Times a friend of the occupant of the house, who was believed to be drinking with him in the hours before the fire, left the scene shortly after emergency services arrived.
Detectives and two fire investigators were at the address on Saturday.
Police believed they knew the identity of the person whose body was discovered at the scorched home, but would not provide further details until formal identification had taken place.
Fire and Emergency New Zealand East Otago assistant area commander Craig Geddes said the cause of the blaze remained under investigation.
The body was discovered in the house as firefighters fought to extinguish the flames, he said.
The fire was reported to emergency services shortly after midnight on Friday.
Three fire appliances, two ambulances and police attended the fire which tore through the flat, one of four in a multiplex.
The residence was "well known'' to Fire and Emergency.
"We have been there before for other incidents,'' Geddes said.
Neighbours described the terrifying intensity and speed of the blaze.
"I have never seen anything like that,'' neighbour Ngatuaine Taana said.
"I was scared.
"I could feel the heat and the windows were popping out. They were just bursting out - it was crazy.''
She believed the fire had started at the rear of the property.
"There were flames everywhere,'' she said.
"There was heaps of smoke. It was just blazing smoke.''
She evacuated her own home, fearing the fire would spread.
A neighbour who lived in the multiplex said he mistook the noises from the fire as someone cutting up wood.
"Then I heard glass smashing,'' the man, who did not wish to be identified, said.
"I thought it was someone smashing my window panes.''
He went outside to check and was confronted by the blaze.
"The heat was so intense. It was very fast,'' he said.
"We heard things banging and exploding. Pop, pop. Bang, bang. It was almost like Guy Fawkes night.''
Other neighbours had attempted to rescue the flat's occupant.
"Four or five people tried to get in but the whole thing was so involved, so they just didn't have a show,'' he said.
"It was too fast and too volatile. They were beaten off.''
Taana said the occupant of the flat was a middle-aged man who required a wheelchair and had lived in the flat for a decade or longer.
He lived alone, however. Taana believed he had been drinking with a friend in the hours before the fire erupted.
"There was another person who was with him, but he disappeared straight after the police and that arrived,'' she said.
The man was also spotted by other neighbours.
"He was standing here,'' an anonymous neighbour said motioning across the street from the flat.
"He just disappeared. He was there and then gone.''
Geddes described the death as a "tragedy''.
"It's a timely reminder of the speed of fire, but also a timely reminder that we have all got working photoelectric fire alarms in place,'' he said.
"It's an unfortunate tragedy that reminds us to ensure to look out for all our people out there.''
He could not confirm on Saturday whether the gutted flat had working fire alarms.
A Housing New Zealand spokesman confirmed the multiplex was owned by the corporation.
"Our sympathies are with the family of the deceased,'' he said.
Senior Sergeant Sam Ramsay said police could not comment further on the man's identity or the cause of the blaze while inquiries continued.
He could not comment on whether the fire was suspicious.
