Four suspects allegedly shot the victims in Umzali, KwaZulu-Natal, before midnight on Friday, initial information suggests.
One of the suspects believed that one of the victims had his ID, dropped accidentally during a previous murder he was wanted for.
South Africa has one of the highest murder rates in the world.
It is thought the suspects shot two people inside the house, a third in a backroom and a fourth next to an outside toilet, a police statement says.
The suspects then allegedly proceeded to shoot three people in a shack nearby.
One of those victims was later rushed to hospital.
Three of the suspects have been identified and police are calling on anyone who might have information on them to come forward.
Source: bbc.com