The bodies of two adults were found outside a building and the rest were found inside.
There was no ongoing threat to public safety, police said.
"Look, this is a horrific tragedy for any person involved, and clearly officers and other first responders attending these sorts of scenes, it is very tragic", Mr Dawson said.
Police did not immediately identify the dead, saying they were still trying to locate next of kin, but authorities believe all seven people who were slain were residents of the property, the newspaper reported.
Upon arrival, 4 children and 3 adults were found deceased.
At the moment the main version of incident is a mass murder-suicide, according to broadcaster ABC.
"This devastating tragedy will no doubt have a lasting impact on the families concerned, the whole community".
Australia has not experienced such a mass shooting, defined as the death of five or more people, since 35 people were gunned down at Port Arthur in April, 1996.
Mr Dawson said: "This will be a very large scale and detailed investigation".
Police say they are unable to share any other details and are now looking for next of kin and friends to notify.