Police are now investigating a homicide after a body was found in a rural area north of Dunedin on Monday, and forensic scientists continue to work at a gruesome crime scene in the city. George Block reports.

A picture is developing of a blood-spattered Lock St property in the Dunedin seaside suburb of St Clair as being embroiled in the drug trade.

Patched gang members are seen daily in the street following what appears to be a brutal slaying.

A sighting has also emerged of a woman linked to the Housing New Zealand home that police on Wednesday confirmed was related to the discovery of the body.

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Southern district field crime manager Detective Inspector Shona Low said police were seeking sightings of a dark blue 1995 Toyota Emina people-mover, driven from Dunedin to Picton early on Tuesday, February 5.

That was the same day police received a missing person report they earlier said was related to their examination of the Lock St crime scene.

Officers are treating the discovery of the body as a homicide, and working alongside forensic experts at the cordoned-off St Clair flat.

Police are supporting the family of the dead person, Det Insp Low says.

Police discovered the body about 8pm on Monday in what they described as a ''rural location north of Dunedin'', without providing further details.

They were also unable to provide the gender of the person found, pending a postmortem scheduled for today and formal identification of the body.

Pensioner Marie Dobier lives in a flat adjoining the crime scene, described by a neighbour who went inside before police arrived as sprayed with blood and having drag marks on the floor.

It was until recently tenanted by a man and a woman who had only been there about a month.

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Dobier was certain she saw the woman at Dunedin Hospital buying coffee last Monday, but said she had not see her since.

She and a neighbour described the mystery woman as having long brown hair with extensive tattoos on her arms.

Despite being separated by only a wall from the crime scene, the 67-year-old said she was not scared and would not move.

''I do my own thing. Just pretend it's not even happening.''

Other neighbours said, after police descended on the property early on Sunday, patched gang members had visited the street daily.

A man living in a Housing New Zealand flat behind the crime scene, Chris White, said he understood methamphetamine was being sold out of the house.

Several other neighbours agreed, saying it was frequently the site of drug use and dealing.

People had visited it to seize a washing machine and fridge, he said.

Hours before police released the photo of the dark blue people-mover of which they were appealing for sightings, White said a ''blue van'' had also been taken from the property.

The dark blue people-mover of interest in a homicide inquiry after an alleged dash from Dunedin to Picton early on February 5. Photo / New Zealand Police
The dark blue people-mover of interest in a homicide inquiry after an alleged dash from Dunedin to Picton early on February 5. Photo / New Zealand Police

He had been told it was ''sold up in Nelson on Monday''.

White suffers from an array of health problems and said he was desperate to leave the street, but was not hopeful his application for a transfer would be approved.

''I don't know why I came here.''

- Dunedin police (03)471-4800, Crimestoppers 0800-555-111.