A stretch of McDougall Road in Waterloo has reopened to traffic after emergency services responded to a residential fire on Saturday morning.

Waterloo Fire Platoon Chief Wilf Hergott told CTV News that crews arrived just after 9:40 a.m. and found a shed engulfed in flames at the back of the property.

The fire destroyed the shed and damaged a nearby garage, while also spreading to a shed on a neighbouring property.

"We could see that there's a boathouse [on the neighbouring property] and it looked like it had started to catch fire a bit, or there was some burning on top," nearby resident Matthew Scott told CTV News.

Officials estimate $150,000 in damages to the shed and garage, as well as $5,000 in damages to the neighbouring property.

No injuries were reported and a cause is undetermined.

"I think we're all kind of surprised," Scott said. "Definitely wasn’t something that I expected to wake up to this morning, but I'm glad everyone's safe."

McDougall Road was closed for several hours between Erb Street West and Keats Way, but has since reopened to traffic.

No further information has been given at this time.