Two adults were located outside and the other five victims were found inside the house.
Police also found two firearms.
It has been reported the deaths are due to a murder-suicide. Commissioner Dawson was unable to confirm this but said some of the bodies had gunshot wounds.
Neighbour Richard Dosser told the ABC he had spoken to someone who lived in the house, who works as a farm maintenance worker.
"I was talking to him on the phone last night, I was going to ask him to come over tomorrow," he said.
"He seemed very vague."
The police comissioner said the deaths would have a lasting impact on the tiny West Australian community.
"This devastating tragedy will no doubt have a lasting impact on the families concerned, the whole community and, in particular, the local communities in our southwest," Mr Dawson said.
"Homicide Squad detectives from Perth are assisting local police in investigating the circumstances surrounding this tragedy. They will be supported by other specialist police units.
"A police chaplain is in attendance to provide support to all persons, officers and others that are impacted by what has happened."
Mr Dawson said it was "not appropriate" to speculate on further details, but assured there were no "wider public safety issues at this point in time".
"We will provide an update later today as this investigation continues. I will take questions but, as I've said, there's little more that I can add at this point in time," he said.
The commissioner said the incident had taken its toll on first responders.
"This is an horrific tragedy for any person involved, and, clearly, officers and other first responders attending these sort of scenes, they find it tragic. We will get on with our job, but, regrettably, these tragedies to take their toll on everyone," he said.
In a statement, West Australian Police said: "Specialist units from Perth, including the Homicide Squad and Forensic Crime Scene Unit have deployed to the scene. Police are expected to remain at the residence for an extended period of time."
Police rushed to the rural property just after 5am after receiving an emergency call.
The commissioner confirmed the person who made the call had some connection to the property but would not confirm the nature of the connection.
He was also unable to confirm the ages of the children as police are still in the process of notifying next of kin.
Mr Dawson also urged anyone with any information about the Osmington tragedy to contact police as they begin to comb through evidence.
"There's a priority to these investigations so we'll immediately concentrate on the
actual scene itself and, as matters are further investigated, naturally, we would be asking for anyone that does know anything about this matter to contact police," he said.
