Auckland police will be making inquiries in the suburb today to make sense of how a man came to be shooting at his own house which was empty.
Armed police swarmed Wallingford Street shortly after 5pm yesterday after being told that a man in an agitated state was standing on the street with a gun.
They shot and critically injured the man, who they say pointed his gun at officers when they arrived.
Superintendent Karyn Malthus said the man ignored police's instructions.
"Police went forward towards the man and called upon him several times to put down his firearm, however, he raised it towards police staff and was shot at that time. He was shot once.
"We understand that this will be an incredible shock to the community and residents of the Grey Lynn community on what would have seemed like an ordinary Monday night.
"We also want to reassure them that there is no ongoing risk."
The 32-year-old man is now in hospital.
The man's neighbour, Graeme Gunthorp, said he and his family huddled in the basement until the shooting stopped.
Gunthorp, who is on the Waitematā Local Board, lives next door to the man who was shot by police and called them after hearing some gun shots.
Once he realised that there were gun shots they bundled their children up and did not want to be anywhere near what was happening outside, he told RNZ's Morning Report programme.
His children are aged one and three and the first 10 minutes of being in hiding were shocking, he said, with the children just wanting to be hugged but he needed to stay on the phone to the police.
He heard two clusters of gunshots - an initial burst of six shots and about 10 minutes later, the police warned him there might be further shots and he heard another two.
"I've been to a shooting range, I've fired guns on a farm but to hear it on a quiet suburban street was pretty shocking."
Early on in the incident he could hear yelling from the assailant and he was worried abuse was being directed at the neighbour on the other side. He managed to ring all the nearby residents and ensure they were OK.
There have been incidents with the person before but none involving gunfire. He was well known to neighbours and the police, Gunthorp said.
"We're happy that the police have resolved this, we feel a lot better about the situation and we've got to recognise that Auckland is still incredibly safe and Grey Lynn is a fantastic place to live."
Police intend on talking to locals about what happened.
The scene was guarded overnight.