Neighbours stood outside as emergency services worked and at least two homes had had their power cut as a result of the blaze.
Residents Nicole and Davide Bozzetti were sleeping in their home next door when they heard someone banging loudly on their window, yelling: "Fire, fire, fire!"
Mr Bozzetti said he looked outside to see huge flames and plumes of smoke billowing near their house and rushed to get the couple's 3-day-old baby girl, Greta.
"I said to my wife, 'get the baby!' We grabbed the baby and ran out. The fire was so big," Mr Bozzetti said.
"The girl next to [our home] who is seven months pregnant, she ran out with her big belly too."
People walking through a nearby alleyway raised the alarm by banging on neighbours' windows, waking them up.
Neighbours said police had told them that the blaze had been caused by a suspected P lab and had asked whether they had heard any loud explosions.
Neighbours said the house belonged to two middle-aged brothers, who had not been seen at the property for some time.