A woman who was at home with her two daughters and nephew when a man on a bulldozer allegedly destroyed her house has spoken of her terror during the ordeal.

The 48-year-old man was arrested after he allegedly drove a stolen bulldozer into the home at Teralba, near Newcastle.

Deborah Kerr, 56, said she heard a large rumble and looked outside the window to see the dozer.

“He picked the [bulldozer] bucket up and started to go for the house, we just ran straight out the front doors,” she told 9 NEWS.

Deborah Kerr told 9NEWS she had lived at the address for 15 years.

Police tape surrounds the scene. (Twitter @janegoldnbn)

She was at home with her two daughters, 15 and 20, and her nephew during the incident.

“You could tell he wasn’t going to stop at nothing,” she said.

Mr Kerr said she has lived at the property for the past 15 years.

Police were called to the Weir Road property about 7.10am today, after reports a bulldozer had crushed parked vehicles at the home.

IN PICTURES: NSW home, cars allegedly destroyed by family friend in bulldozer View Gallery

"Investigators have been told a 48-year-old man allegedly drove a bulldozer over the top of vehicles parked in front of the house, and another that was parked at the side of the property," a police statement read.

The man then turned the bulldozer towards the house before allegedly continuing over the building until it was demolished.

When police arrived, an officer reportedly jumped aboard the bulldozer and pressed an emergency stop button, neutralising the alleged attacker with pepper spray.

It is alleged the bulldozer was stolen from a local plant on Railway Crescent.

The house has been destroyed. (Twitter @janegoldnbn)

A bulldozer remains at the scene. (Twitter @janegoldnbn)

Police tonight charged the 48-year-old man with a range of offences, including breaching AVO conditions, entering enclosed land, take and drive conveyance and destruction of property.