The disappearance of British backpacker Grace Millane in New Zealand is being treated as a suspected murder, police said.

A 26-year-old man is being questioned by detectives after he was located at an address in central Auckland on Saturday afternoon.

He is expected to be charged with the murder of Grace Millane and appear at Auckland District Court on Monday.

Police said they are still looking for Ms Millane, 22, from Wickford, who was last seen in the city on December 1, although evidence suggested she had been killed.

Her family have been left "devastated" by the development, Auckland City Police Detective Inspector Scott Beard said.

"The evidence we have located so far, our scene examination, some of the CCTV footage we have, and our investigation, has determined that Grace is no longer alive and that this is a murder investigation," he told a press conference.

"Grace's family have been advised of this development and they are devastated."

Det Insp Beard added: "We still do not know where Grace is. We are determined to find her and return her to her family."

Ms Millane, who went to college in Southend, was described as a "lovely, outgoing, fun-loving, family-orientated daughter" by her father, David Millane.

She graduated from the University of Lincoln in September and had embarked on a year-long worldwide trip.

After visiting Peru she arrived in New Zealand on November 20 and had been near-daily contact with her family until December 1 - the day before her 22nd birthday.

The last confirmed sighting of Ms Millane was at 9.41pm the same day at the Citylife Hotel in central Auckland, when she was seen with a "male companion".

Police later said they had spoken to the man and that he was a "person of interest", although he was not held in custody.

Det Insp Beard confirmed that the man being questioned by police on Saturday was the same individual.

"We know that he was with her on the Saturday evening and went to a number of places before going to the Citylife Hotel," he told reporters.

Police have not uncovered any evidence the pair had met before. Asked if they had met on the Tinder dating app, the detective said: "I'm not going to speculate on how they met. The issue here is Grace is still missing and we want to find her."

Detectives seized a "vehicle of interest" on Saturday and inquiries were under way to establish where it had been.

Earlier searches of Ms Millane's accommodation at a backpackers' hostel found several items, including her passport, were missing.

On Saturday police released images of a pink watch and a necklace belonging to her and asked for the public's help in finding them.

The major police search and public campaign for information led to dozens of calls being made to a hotline.

"I know that the thoughts of all New Zealanders will be with Grace's family tonight," Det Insp Beard said.

"I want to reassure everyone, both here and abroad, that New Zealand Police are determined to do everything we can to find her."