A police spokesman said officers responded to a report of a firearm at an address in Oakland St at 11.30am yesterday.
The armed offenders squad attended as a precaution, the spokesman said.
The man who was arrested was sitting in his vehicle in front of the property when police arrived, he said.
There were no reports of injury to anyone involved, the spokesman said.
When the Otago Daily Times arrived a cordon had been set up at the intersection of Oakland St and Tomahawk Rd.
Nearby, at the intersection of Oakland and Duckworth Sts, another police unit prepared road spikes, but they were not used.
A nearby resident said he saw three armed police going up the street.
The incident was unsettling as the neighbourhood was usually pretty quiet, he said.
Other residents in the area said they heard shouting followed by screams before police arrived.