Cate Kennedy's second short story collection, Like a House on Fire, was published in 2012 by Scribe. In the collection, Kennedy explores topics of displacement, illness, recovery, dependence, and motherhood, among other things. The stories in this collection often dwell in domestic spaces, or dwell on the domestication of institutional spaces, as in "Laminex and Mirrors," which is narrated by a recent high school graduate working on the cleaning staff of a hospital.
Like a House on Fire was long-listed for the 2013 ALS Gold Medal award, short-listed for the 2013 Kibble Award and Stella Prize, and won the 2013 Steele Rudd Award. The Ballarat Courier calls the collection "bewitching," and Instyle Magazine claims it is "short fiction at its best." John McCrystal of the NZ Herald claims that while "each of the stellar stories in Australian Cate Kennedy's new collection, Like A House On Fire, would anthologise well, outshine anything else in a literary journal and likely clean up in most short-story competitions ... all together in one place, they somehow lose their impact" referring to the way in which Kennedy employs a similar emotional-turning-point structure to each story. However, the overwhelming positive character of the criticism as it pertains to the individual stories is a further testament to Kennedy's craft.