Police have confirmed they are investigating a murder after a body was discovered in a rural area north of Dunedin on Monday evening.

Meanwhile, a sighting has emerged of a woman possibly linked to a bloody crime scene in Dunedin police now say is related to the discovery of the body.

Officers and forensic experts continued to examine the crime scene, described by neighbours who had been inside before police arrived as blood drenched and with drag marks on the floor, at a home in Lock St, St Clair today.

Police confirmed for the first time today they are treating the investigation as a homicide.

Southern District field crime manager Detective Inspector Shona Low said police were appealing for information about a Dark Blue 1995 Toyota Emina people mover, driven from Dunedin to Picton in the early hours of 5 February.

Police are seeking sightings of this vehicle.

The body was yet to be formally identified and a postmortem was scheduled for tomorrow, Low said.

Police have yet to confirm whether the body was male or female, or where exactly it was found.

Neighbour Marie Dobier, who lives in an adjoining flat, said she saw the woman who lived at the property at Dunedin Hospital on Monday last week, six days after the man who lived at the property went missing, according to police.

Another neighbour said the woman's first name was Aleisha and she had moved down from Christchurch to move into the Housing New Zealand property in Lock St, St Clair, with a man described as her partner.

He had taken her to the Food Bank before she and the man disappeared, he said.

She had brown hair, tattoos, and was described as in her 30s.

Police announced they were investigating after a body was found in a rural area north of Dunedin, as detectives and forensic scientists examined what appears to be a blood-spattered crime scene the Lock St house.

In a statement police said the property was being examined following a missing person case from February 5, but would not say whether the scene was linked to the discovery of the body.

They have not specified where the body was discovered, only saying it was found in a rural area north of Dunedin.

A neighbour, Stephen Voight, said he saw blood sprayed across the walls inside and pooled on the floor when he went inside before police arrived.

He and his friend were at home about 3am on Sunday, watching movies, when they heard banging nearby, followed by the sound of glass breaking, he said.
His friend went to investigate and saw a man kicking in a door on the property. The man then began yelling, ''It's a crime scene ... somebody call the police!''

The man and woman who lived at the property had not been seen for several days, neighbours said.

Voight understood from police the violent incident happened about 14 days ago.

A man was seen loading several blue containers into a car from the house in recent days, he said.

The 44-year-old, who is serving a home detention sentence, said no-one could have survived whatever happened in that house.

''There's too much blood.''

The pair who lived in the house had only rented it for about three or four weeks, he said.

Other neighbours said police told them a man went missing from the house in suspicious circumstances.

Police told them there was blood inside but would not confirm if they had found a body.

The man and woman who lived there kept to themselves, one neighbour said.

''They hadn't even been there that long, but so many people come and go from these houses, it's ridiculous.''

Drug users and mental health patients were increasingly moving into the east side of the street, where many houses were owned by Housing New Zealand, the neighbour said.

''The police are up there every two or three days.

''When we moved in here, these houses were all pensioner flats.

''There were lovely people in them - now the whole neighbourhood has gone to the pack.''

However, at least one pensioner remains on that side of the street.

Marie Dobier, 67, has lived in a flat next door to the scene of the crime for decades.

She woke up early on Sunday.

''... and next thing a policeman was there''.