A Rotorua street was blocked off by the Armed Offenders Squad, after reports of a man with a gun arguing with a woman.
Police found a firearm at the property shortly before 5pm, but the man involved in the argument was believed to have left the scene.
Inquiries were ongoing to find him, she said.
Nobody was injured in the incident.
A police media spokeswoman said a person called police at 3.18pm today to report a man and woman arguing.
The caller also reported that they thought the man was holding a gun.
Police attended and put a road block in place on Tania Cres in Western Heights. Steeles Lane was also closed off.
She said the Armed Offenders Squad was involved as a precaution, as was standard when there were reports of a firearm.
Local resident Timothy Mason-Mahana was waiting at the cordon for about an hour.
He said his first thought when he saw all the police cars was worry that "someone wouldn't get to go home for Christmas".
Another resident, who did not wish to be named, said her first thought was "not again".
She said there had been similar incidents about four times this year and she had only lived in the area a year.
When the cordons were removed she said it was a great relief as it was "too hot to sit around".
Rotorua police have closed Tania Cres in Western Heights after reports a couple were arguing and one of them had a gun.
A police media spokeswoman said there were reports of someone having seen the gun but there was no confirmation there was one.
"A roadblock is in place and we are currently searching a car."
She said the call came in at 3.18pm. The caller could no longer hear yelling and it appeared the couple had both gone into a house.
Armed police are at the scene.
A Rotorua Daily Post reporter at the scene said there were at least six police cars and multiple officers at the cordons.
"There are police officers that look like they are in the armed offenders' gear."
She said things seemed relatively calm and the police were keeping an eye down the street.
Police are stopping cars leaving the cordon and using dogs to check the vehicles.