The body was discovered last night, hours after the blaze was extinguished on Hollywood Crescent in North Willoughby.
It’s understood mother-of-two Joyce Lewis was killed in the blaze, but police say the person is yet to be formally identified.
Neighbours first called emergency services after seeing thick flames coming from the property about 9.30am.
More than 40 firefighters and at least 12 appliances rushed to the scene.
“I tried to get a ladder up there but there was no chance,” resident Arman Kum said.
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“Joyce was screaming out my name until the very last minute.
“I tried to get there, but I just couldn’t.”
A firefighter was also taken to hospital after burning his hand while trying to access the property.
It’s understood Lewis was the only one at the property when the blaze began, with her husband interstate.
Firefighters are working to determine the circumstances surrounding the fire, the cause is not yet known.