Neighbours say a five-year-old homicide victim and his family were new to their street.
Police have launched a homicide inquiry and charged a man with assault after the young boy died in Rotorua Hospital on Saturday night.
The exact details of what happened remain unclear but neighbours told the Rotorua Daily Post they woke up on Sunday to find a Union St home cordoned off.
Resident Craig Nelson told the Rotorua Daily Post he saw "police everywhere" down the street on the weekend.
"It's sad to hear that the baby [child] died."
He said the parents of the child were new to the neighbourhood.
He had only seen the five-year-old once but there was nothing unusual and he was "just playing like a normal child".
"I don't know what happened... This is a beautiful neighbourhood, nothing really goes on around here. Mainly tourism - hotels down the road."
A woman who lived next door to the property, who only wanted to be known by her first name, Vaishali, said she woke up early on Sunday to see police had sealed off the house and there were three police cars outside.
Police later visited her home and asked if she witnessed anything.
They said the circumstances were "all confidential" while police interviews and forensic examinations took place.
She said she had seen both a young boy and a young girl at the home on various occasions.
A child's blue and black tee shirt has been placed on a tree near the property.
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A flax flower wrapped in a blue a ribbon has also been placed on the tree in the boy's memory, with "rest eazy neff" written on it.
A man came out of the property while the Daily Post was there, looked at the tree and said loudly "it is sad" before returning inside.
All of the curtains at the house were closed and a large roll of carpet leaned against a wall outside the front door.
Police said a post-mortem was under way as a homicide investigation into what happened continues.
A 24-year-old man appeared in Rotorua District Court today charged with assaulting a child. He was remanded in custody and is due to reappear on March 3.
Police said further charges are likely.