A man accused of fatally stabbing a teenager at a birthday party in Sydney at the weekend is expected to have his charge upgraded to murder or manslaughter, according to prosecutors.

Jacob Lusted, 20, has been charged with affray over a stabbing in which Aidan Smith, 16, died and five others were injured.

The stabbing happened during an 18th birthday party being held at the share house where Lusted lived on Victoria Road at Ryde.

Lusted was among six men and one woman who were stabbed when a fight broke out just after midnight on Saturday.

He had been under police guard in hospital since the stabbing, but was taken to Parramatta police station on Wednesday where he was charged.

Lusted did not appear in person and chose not to apply for bail when his case was heard at Parramatta Local Court.

A police prosecutor told the court it was likely Lusted's charge would be upgraded ahead of his next court appearance.

"It's looking to be upgraded to a murder or manslaughter charge," the prosecutor told the court.

Lusted will now remain in custody until his next court appearance on August 24.

Incident occurred in 'transitional housing'

The house on Victoria Road where the incident occurred is owned by Land and Housing NSW but managed by My Foundation Youth Housing Ltd as transitional housing for young people at risk of homelessness.

Residents living at the house are supported by Taldumande Youth Services.

In a statement, Taldumande Youth Services CEO Lisa Graham said the service was "deeply saddened by the tragic event" and offered condolences to the people involved.

"Taldumande Youth Services supports vulnerable children, young people and their families. We specialise in crisis response, residential care and support," it said.

The statement confirmed the house where the incident occurred was transitional accommodation for people aged 16 to 21, but did not comment further as the matter was before the courts.

The CEO of My Foundation Youth Housing Ltd, Rebecca Mullins, declined to comment as the matter was before the court.

The ABC is not suggesting the fact that the home is used as supported accommodation is in anyway connected with the stabbing.