Police would not comment on the exact circumstances around the death except to say that it appeared to have been violent.
Mr McFarlane was single and lived by himself.
The investigation was in its early stages and the focus was on the victim's movements and the events leading up to his death, police said.
Mr McFarlane's body was likely to be removed from the scene today and a post-mortem examination would carried out tomorrow.
Nearly 40 police staff were working on the inquiry and ESR scientists were assisting with a scene examination at the Pine Hill Rd house.
Investigators had also been examining the scene where Mr McFarlane's vehicle was found.
Police wanted to hear from anyone with information about Mr McFarlane's activities over recent days, or who may have seen his car around Serpentine Rd or Pine Hill Rd either later on Tuesday night or in the early hours of Wednesday morning.
Anyone with information should contact the Oamaru Police station on (03) 433 1400 or Crimestoppers, anonymously, on 0800 555 111.