Bodies of the deceased were discovered at approximately 5:15 this morning after police received a call, it has been revealed.
"Police are now responding to what I can only describe as a horrific incident", Mr Dawson told reporters in Perth.
'Based on what we do know, this is clearly a tragedy.
Five bodies were found inside the house, and the other two outside, close to the property.
Dawson confirmed that the incident was likely a murder-suicide.
"The loss of any life is tragic but four children and three adults, this is a significant tragedy", he said, adding that police and other specialists would be at the scene for several days at least.
"There was nothing much I could tell them", said the semi-retired farmer.
A local resident who did not want to be named said he understood the property belonged to the grandparents.
"As I'm sure you'd appreciate it, it's not appropriate for me to speculate on any further matters", he said.
"Importantly, from the information I have been briefed on we have no present information to say that there is any public safety concerns at this point in time".
At this stage, no further details about the identity of the victims have been released, however police did confirm they are not looking for a suspect.
A police chaplain is there to support officers.
The rural property near Margaret River where the shooting is believed to have occurred.