It was thought the man, who lived at the house, may have perished in the early morning blaze.

It was also believed that a second person may have been missing, but that has since been discounted.

The fire in the Braybrook apartment, in a block at the end of a cul-de-sac, started about 6.10am and took firefighters 30 minutes to get under control, Metropolitan Fire Brigade spokesman David Rankine said.

One wall and the roof of the unit on Lord Place collapsed.

A nearby resident was alerted to the fire by a neighbour.

"I was in bed trying to sleep and then the lady next door to where the fire was happening was banging on the door," said near neighbour Paul Duncanson. "[She] was saying 'there's a fire' and then me and my brother ran out and saw the place was in flames."

Mr Duncanson said he believed the flames grew to 30 feet in height.

He said the man who lived in the apartment was seldom seen. "[He] basically lived like a hermit" Mr Duncanson said.

Local sources say the man, known as Ned, whose unit was destroyed in the fire lived without electricity and asked neighbours to plug in an extension chord for him on occasion.

It is understood the man may have been hoarding a large amount of material at the unit and the excess debris caused further delays to the investigation.

Police and fire crews were still working at the scene until just after 3pm sifting through remains of the fire when the man was spotted on a bike a street away, alive and well.