Insp Harrison said he didn't want to speculate on whether the incident was a domestic matter.
A next-door-neighbour told 6PR that a couple and a young man rented the house from a man who lives in Melbourne and recently put the property on the market.
Insp Harrison said the hostages, whose hands and feet were bound during the ordeal, were distressed and "shaken-up" but had no obvious injuries.
He said they were speaking with police.
A spokesman for Sir Charles Gairdner Hospital said the alleged gunman was in a critical condition in the intensive care unit.
Neighbours have told of hearing officers shouting at a man to put a gun down shortly before shots rang out and seeing the hostages walk out of the house with duct tape on their mouths.
"I heard them yelling 'drop the gun, drop the gun sir' and say 'that's a gun in your hand sir', sort of as if the man who had the gun didn't realise he was holding one," one neighbour told the Seven Network.
"I just stayed in my bed."
A man who lives across the road told 6PR it was a scary ordeal.
"It got fairly intense, with police yelling 'put your guns down, put your guns down' and then we heard a couple of shots, which was fairly frightening on a quiet little street," he said.
Barbara Winter said she called police about 9pm after seeing dark figures outside the home, and became concerned her neighbour might be being robbed.
"I saw all these black-clad people running around my neighbour's front yard," she told the Seven Network.
"The police told me it was them and please stay inside."
When the situation deteriorated, "there was a lot of yelling and screaming".
"Although it was a very frightening situation, it was handled incredibly well."
Two separate investigations are underway, one headed by officers from the major crime unit, another by police internal affairs.
- AAP
