Transport Accident Investigation Commission (TAC) chief investigator of accidents Harald Hendel said they had so far been told the balloon experienced difficulties prior to the landing, and that part of it struck power lines and ended up draped over a house.
A two-person TAC investigation team was on the scene yesterday and would remain there for several days.
"The investigation team's evidence collection work is broad to support the many routes that an investigation could follow," Hendel said.
"The initial focus is on gathering evidence that could disappear or change – such as memories, or the effects of weather and the balloon envelope and basket, which have already been removed from the scene to a secure location.
"Over the next several days, TAIC's investigators will be recording the accident scene, recovering any remaining wreckage, securing electronic records – including photos, videos, and location data on people's cellphones – and interviewing witnesses.
"We're interested in what people have to say, of course, particularly the balloon occupants, and the relevant professional and personal backgrounds of the pilot and other operator staff, what they knew, thought, experienced, and did.
"We'll be looking at the balloon, basket and other elements of the aircraft, its individual and type history, performance, maintenance, design.
"The operating environment is also of interest, including physical, weather, operating company safety system, organisational culture, traffic control, regulatory matters."
Hendel made an appeal for any witnesses who saw the accident or who might have captured the flight on camera.
Two injured passengers were in a serious but stable condition in Dunedin Hospital last night.
Emergency services at the scene in Arrowtown where a hot air balloon crash landed on Friday. Photo / Supplied
Nine other people, including pilot Carrick McLellan, were taken by ambulance to Lakes District Hospital with moderate and minor injuries, including fractures and bruises, but had since been discharged.
The company involved, Sunrise Balloons, released a statement on Friday night in which it pointed to the balloon being caught by a sudden wind gust at it approached the landing, before the basket hit a low bank.
Sunrise Balloons owner and chief pilot Hugh McLellan said the company was "deeply upset".
"We are fully supporting our staff and guests at this difficult time, and we wish all involved a full and speedy recovery.
