The Pigeon Valley fire covers 2,300 ha (5,700 acres) with a 25 km (15 mile) perimeter, NZ Civil Defence said in a statement on its website.
There were fears that Sunday would bring about a worsening of conditions, as strong winds fanned the flames.
About 190 firefighters, 10 helicopters and two planes have been deployed to battle the fire.
However, higher humidity meant firefighters had a "good day", said John Sutton, fire and emergency regional manager on Monday.
The fire continued to burn actively overnight and is still not in control.
Helicopters being used to fight the fire have at times been diverted to douse other flare-ups in the region, including one on tree-covered hills bordering Nelson city which is home to about 50,000 people.
"Our most significant efforts are now focused on a fire front near Wakefield which is moving slowly downslope", Fire and Emergency said.
"There's still an enormous amount of heat there are and there are a lot of unburned areas", he said.
Another 400 residents living in valleys near the fire aren't yet able to return, although officials hope they will be able to soon.
New Zealand Red Cross Communications Manager Ellie van Baaren said evacuees were exhausted and frustrated. Some livestock has also been moved to safety.
Bushfires are relatively uncommon in New Zealand, but this is the second significant blaze in two years and follows a heatwave that pushing temperatures in some parts of the country to 30C.
The fire is believed to have been started at a nearby farm.