The tenants were staying with family members tonight.
Housing New Zealand could not comment further until the Fire Service investigation findings were known, he said.
Neighbour Sharron Simms said she woke up to the sound of people screaming and loud popping that sounded like gunfire.
She saw the flames rising high through her window and rushed to wake her daughter and take her outside.
Her daughter has a physical disability and is "immobilised", Ms Simms said.
"I had to run to get her out of bed and into her wheelchair and boom, straight outside.
"I had pyjamas on and bare feet...I bundled her up and got her out as fast as I could. It was well alight. If [the fire service] had been 10 minutes later or something it would have jumped straight over."
A group of neighbours stood across the road by the school and watched the emergency response, she said.
It was hard to see her driveway from across the road through the smoke.
Ms Simms said the fire service acted quickly and did a "marvellous job" of extinguishing the blaze.
"It gives you an appreciation for what they do everyday," she said.
Napoleon Pasa lives on the other side of the blackened state house and says it was a close call.
His home is separated from the property by a small driveway where his car was parked, right next to the bedroom where his children sleep.
If the wind was going the other direction the flames would have jumped across, he said.
"We were dead asleep, I was shocked when I woke up. They reckon if it was windy it would have come over.
"They evacuated the house next door but not my house. It's dangerous," he said.
A Housing New Zealand representative was at the blaze last night, Mr Pasa said.
Another neighbour who witnessed the blaze has described it as "fierce".
Rachel Thompson said she woke up to the flames and fire engines outside her window in the early hours of the morning.
Her Potter Avenue house overlooks the Holdsworth Avenue property, which is three houses away, she said.
"The fire was pretty fierce."
"It was fully engulfed in very yellow, red, orange hot flames coming out of the whole thing. It stayed like that for about five minutes and then just all the dark smoke started."
Nearby residents were standing outside watching firefighters battle the blaze, Ms Thompson said.
It smouldered for about 15 minutes after the fire was extinguished, she said.
A Fire Service spokeswoman said the house was ablaze when two crews arrived this morning.
"When the initial 111 call came through, whoever rung through said there were three people and a dog...when the Fire Service got there they were already out," she said.
A fire investigator was analysing how the blaze may have started.
