A 19-year-old man is in custody after a stabbing attack on a residential Perth street left an elderly man dead and a woman severely injured.

Police were called to Mattison Way in Greenwood about 8am on Monday and found a man aged in his 80s and a woman in her 70s with severe injuries, sparking warnings for nearby residents not to leave their homes.

Ambulance crews rushed the woman to Royal Perth Hospital, where she remains in a stable condition. The man died at the scene.

A large police presence – including aerial resources, dogs, local police and detectives – converged on the quiet residential street about 17 kilometres north of the Perth CBD.

Residents were urged to stay indoors amid fears the knife-wielding attacker remained at large.

One resident told the ABC the quiet of a public holiday Monday was broken when he heard someone screaming “get on the floor” while he was gardening out the front of his house.

“I saw a single officer with the dog squad who had the gentleman,” he said.

“He gave up straight away, he didn’t put up any fight.

“I’ve been here for 25, 30 years, never had anything like this in the suburb.”

Police said they found a 19-year-old man in nearby Kingsley about 9.20am. He was taken into custody.

Police say investigations are ongoing.

They have since confirmed there is no longer a concern for public safety.

However, traffic in and around the area was expected to remain congested for some hours. Motorists were urged to avoid the area.

– with AAP