Raucous couch-burning party-goers in Dunedin have accidentally set a house on fire during their partying, police say.

Officers were called to a large party on Castle Street at midnight, where several hundred party-goers at two houses were spilling on to the road.

While containing the crowd, attending officers saw a fire at the back of a different house, and found the flames from a burning couch had spread to the home's weatherboards.

Police said the occupants were woken and evacuated, and the officers attempted to extinguish the flames before the fire service arrived to put the fire out.

It had begun to take hold within the exterior wall just as it was extinguished, police said. There was damage to the weatherboards.

Inspector Kelvin Lloyd said that it was very lucky that the fire did not cause more damage than it did.

"This incident highlighted the dangers associated with the fire lighting issue in the student area," he said.

"This is exactly the type of case we have been trying to prevent through the consistent and on-going messaging of police, fire and the university."

"We need to stop thinking that this is part of the culture of the area, and accept the very real dangers that this type of offending poses. This is more than high spirited antics and will result in a tragedy or injury if attitudes do not change. "

Inquiries into the incident are on-going and police would like to speak with anyone that has any information that could assist with their inquiry.

The incident follows warnings from police earlier in the week, when five people were arrested, also for couch-burning.