A fire that has badly damaged a Christchurch house is being treated as possible arson.

A flurry of phone calls from neighbours and passers-by quickly raised the alarm after fire broke out at the Phillipstown property about 1.30am.

The house was well alight when fire crews arrived.

It's the third major house fire in Canterbury this week.

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Fire Service spokesman Darryl Ball said people were initially feared missing in the burning Cross St property but everyone was eventually accounted for and escaped safely.

A police spokeswoman said the fire was being treated as a suspected arson and officers were at the scene.

Ball said thanks to the quick response of those who spotted the flames only half of the building was damaged.