Three children - believed to be the man's own family - are also in the house, in Sibley Street, but are not being held hostage, a Victoria Police spokesman said.
The alarm was raised after the partner of the man fled the house at about 2am (AEST) today.
Police negotiators and officers from the elite Special Operations Group (SOG) are on the scene.
Police are looking for three men who allegedly abducted two 13-year-old girls in Sydney's south.
The men forced two 13-year-old girls into the back of a car outside a shopping centre on Bunnerong Road, Botany about 6pm (AEST) yesterday, police said.
The two girls managed to escape from the car about 45 minutes later at Clarence Street, Matraville.
Police are seeking three males described as being of Mediterranean or Middle Eastern appearance aged in their late teens or early 20s.
The first male is described as obese with short dark hair, wearing a singlet and tracksuit pants.
The second and third males are described as having a solid build, wearing dark hooded jumpers and white shoes.
Police have seized a machete after a teenager was struck in the back of the head by a weapon, in Sydney's south west.
The 17-year-old male was struck after he allegedly attempted to punch another 17-year-old outside a party at Edensor Park about 9.30pm (AEST) yesterday, police said.
He suffered lacerations and was taken to Liverpool Hospital for treatment.
Police found a machete in a nearby house and are appealing for information about the malicious wounding incident.
Police wish to speak to a man who is described as being of Asian appearance, 165cm, skinny build and wearing a cap.
A man died and several other people were injured when two cars collided at an intersection near Newcastle.
The male driver of a Ford Falcon died instantly when his car crashed with another vehicle at 7.15am (AEST) today at the intersection of Dorrington and Wangi roads in Toronto.
Police said his female passenger also suffered injuries in the crash and was taken by helicopter to John Hunter Hospital.
The female driver of the second vehicle was also airlifted to the hospital, while three people travelling in the car suffered minor injuries and were treated at the scene.
Break and enter
In Sydney's north-west, last night a man was held at gunpoint before his home was ransacked during a break and enter.
Police said two men forced their way into the house in Parkwood Street, Plumpton, after a woman answered the door at 9.10pm (AEST) yesterday.
The man and woman were ordered into the lounge, with one of the assailants allegedly pointing a gun at the man's head.
A sum of cash was stolen before the men fled in a black station wagon, police said.
The two men are described as being around 175cm tall with medium builds.
One was wearing a dark-sleeved top, while the second was wearing a flannelette top.