Ken McHoull, of Warrington, said he thought he saw Harraway, who was wanted by the police in relation to an ongoing investigation, camping on Warrington Beach.
"I read about it in the Otago Daily Times and the guy on the beach was acting really weird."
A police spokeswoman said Harraway was found in a car in Moray Pl, Dunedin, about noon.
In Warrington, Mr McHoull said police armed themselves in his backyard before approaching the first suspect, who was in a tent on the beach.
Police were armed as a precaution, and Mr Harraway had no history of violent or serious offending, the spokeswoman said.
Police issued a statement on Monday asking for sightings of Mr Harraway and a white Nissan Tiida.
Dunedin police had concerns for Harraway’s mental health following concerning exchanges with associates.
It is believed he is suspected of being involved in the theft of three vehicles in Otago and South Canterbury.
Police also wanted to speak to him in relation to a report of a man attempting to access residential properties in the student area.
Harraway was originally from the upper North Island, but has lived a transient lifestyle recently.
He was in police custody yesterday.
