A HOMELESS man's search for warmth in an empty Woollahra garage not far from Sydney's wealthiest residents ended in tragedy yesterday.

Just after 3.30am on Monday residents rang Triple-0 about fire coming from the terrace house under construction.

After a short search, police located a body in the garage on Dawson Lane, at the rear of a block of flats worth $1.5 million, which fronts on to Rowe St.

media_camera The Bondi Junction carpark where many homeless people sleep / Pic: Tim Hunter

A secondary crime scene was set up at the top of the lane, where the homeless and youth congregate, an area littered with a dirty mattress and bedding.

For nearby residents and workers, the grim event offered another stark reminder of the disparity between the lifestyles of those with an address and others living rough in Woollahra's streets and carparks.

Jan Lewis, who lives a few doors down from the charred garage on Dawson Lane, said more needed to be done for the homeless in a suburb where the median monthly income for a two-child family is $3500 and unemployment is 3.8 per cent.

"I think they should have more homes for people; they don't seem to have them anymore. They just let them wander about. I feel very sorry for the old men," she said.

Candles were found near the body of the man, believed to be aged between 45 and 55, and police are certain the victim's search for refuge from Sydney's cold snap, which dropped to 8.7C at 3.22am, is the most likely contributor to his death.

STREETS OF SCARS - PORTRAITS OF SYDNEY'S HOMELESS

media_camera A homeless man on Oxford St Bondi Junction / Pic: Tim Hunter

"It appears the man has gone into the garage to escape the cold," Rose Bay police commander Detective Superintendent Michael Fitzgerald said.

"There were candles also found near the body. Sadly it appears to be a homeless man trying to escape the cold."

A bag was also found near the body, burnt badly enough to make identification difficult.

"A lot of these guys have dropped out so finding relatives and even dentists is not the easiest task," another Rose Bay police officer said.

The terrace home was being converted to four units and had been empty for two years.

Following several small fires, a 24-hour security guard had been put in place in 2012 and the front gate locked.

Neighbour Jon Bartlett said the garage door was also usually locked but he noticed it was open over the last week or so.

He said youths often used the garage to hang out and he had seen an old sofa and a plastic swimming pool in the single garage.

"It's very sad. There are too many homeless people who have problems who are not getting help," he said.

He said there were issues in getting rubbish cleaned up at the end of the street because it was on the border between Waverley and Woollahra councils and it wasn't the most expensive part of the suburb.

Rose Bay's Joyce Richenberg attends the COA Jewish community group centre a few doors up from the burnt-out garage several times a week.

She said she often saw one man reading the Bible slumped up against a wall on Davis Lane, near Dawson Lane.

"You see them lying down but you're not sure if they are alive. What a shame," she said.

Waverley council worker Jarrad Meyers, 25, said he knew of at least two homeless men who lived under the Syd Einfeld Drive overpass less than 100m from Bondi Junction railway station and close to where the man died.

He said there were at least 30 homeless people who congregated around the junction and at nearby Waverley Park.

"You'd be surprised how many homeless there are," Mr Meyers said.