A 39-year-old man shot in an early morning incident at a Gisborne property yesterday has died in hospital overnight.

Police say the investigation into the shooting of the man at a house in the suburb of Elgin has now been upgraded to a homicide investigation.

Detective Senior Sergeant Craig Scott says at approximately 2.40am on Sunday a man entered the Te Hapara home and made demands before shooting one of the occupants. He then fled the scene in a vehicle.

'We believe this man is known to the two people who were at the address.”

The victim was taken to Gisborne Hospital by an ambulance in a critical condition, where he died overnight.

A 42-year-old Gisborne man was arrested by members of the Armed Offenders Squad at another local address shortly after the incident.

He has been charged in connection with the incident and will appear in Gisborne District Court today, say police.

Police, with the assistance of forensic scientists from ESR, are currently searching three addresses and a vehicle believed to be connected to this incident.

'The firearm used in the shooting is still outstanding and police would like anyone who has information in relation to this or the shooting to please contact the Gisborne Police station.”

Alternatively, information can be provided anonymously through Crimestoppers on 0800 555 111.

Police Iwi Liaison and Victim Support staff will continue to support the family at this time.