A paraplegic gunman shot dead on Sunday night was challenging members of the Armed Offenders Squad to show themselves during the stand-off, police say.
Shayne Richard Sime, 42, who was in a wheelchair, was killed by police after firing more than 100 rounds in the suburb of Burnside where he lived.
An armed officer and a neighbour were shot and wounded during the siege on Sunday night.
The officer is expected to make a full recovery after surgery to remove pellets from his face on Monday, while the neighbour is reported to be in a stable condition in hospital.
Police say Mr Sime was armed with a shotgun and a .308 high-calibre rifle, and had a firearms licence.
Police say the man called his family on Sunday saying he was suicidal. He fired up to 100 rounds from the shotgun and rifle "indiscriminately" along Wadhurst Place. Police say Mr Sime had a head injury and had been drinking before the incident.
Speaking at the scene early on Monday, Inspector Dave Lawry said following the shooting of the AOS member, other armed officers returned fire.
Detective Superintendent Brett Kane, who is heading the inquiry, told Checkpoint that negotiators were very concerned as Mr Sime was challenging police. He says Mr Sime wanted officers to come out of cover.
Police made contact with Mr Sime about 8.20pm and negotiations continued for about two hours. Mr Kane says the gunman showed some agility as he fired a large number of shots up the street, peppering surrounding homes.
Mr Sime's body has been removed from the front entrance of his house in Wadhurst Place and post-mortem will be carried out on Monday evening.
Michael, a neighbour, says police investigated shots at Mr Sime's house as recently as February this year. He says he has heard bangs that sounded like gunfire from the property three times during the past 18 months.
Mr Kane says a report on a firearms incident at Mr Sime's house earlier this year revealed he fired a bb gun - an airgun which fires plastic pellets - but that no charges were laid.
Residents not allowed back in homes
Police believe Mr Sime may have shot in a 360-degree arc on Sunday, with bullets travelling up to 7km, and are asking anyone who discovers bullet damage to their property to contact police.
Mr Kane says there is extensive damage to one house in particular and an investigation of the area is likely to take some time.
A cordon around Wadhurst Place and part of Guildford Street is to remain in place for several days. About 40 residents will not be allowed back into their homes for a few days.
About 25 people living nearby were moved out of their homes on Sunday night and stayed in the Burnside School hall or in a hotel.
Resident Russell Keely says his wife, who was visiting a friend at a house next door to the gunman's, heard about 40 shots ringing out about 8pm. The armed offenders squad arrived shortly afterwards and began helping people get out of the area, he says.
Another resident, Colin, who lives next door to Mr Sime, says he thought he heard a shot about 4.30pm and another four shots in rapid succession some time between 6.30pm and 7pm. Police moved him out of the house about 9.45pm, he says.
Andrew Cleaver, whose property backs on to Wadhurst Place where Mr Sime lived, says it was a frightening evening. Police told him someone in the neighbourhood was firing a high-powered rifle and he was to run and if he heard any shots should "hit the deck" and not move.