Man caught in NSW terror raids denied bail

A man charged after guns and ammunition were allegedly uncovered when counter-terrorism police raided his Sydney home has been denied bail.

Jibryl Almaouie, 21, has no criminal record, no "sinister motive", isn't a flight risk and needs access to psychological treatment, his lawyer Greg James QC told the NSW Supreme Court on Wednesday.

But Justice Richard Button said the alleged discovery of the guns - a .303 Bolt-Action rifle and a disassembled 12-gauge shotgun - coupled with the cache of ammunition found in suitcases and a filing cabinet, presented serious concerns and he denied bail.

A bandolier, or ammunition belt, was also allegedly found in Almaouie's Condell Park home, where police say they also located "hollow point" rounds, 20 12-gauge shotgun rounds, a sawn-off shotgun stock, a loaded shotgun barrel and the .303 rifle with a loaded magazine.

Almaouie's DNA was allegedly on the barrel of the gun.

An Islamic flag, not related to extremist movements, as well as several military-themed books, including The Encyclopedia of Combat Techniques, were also allegedly found.

The court also heard Almaouie has "full-blown hallucinations", "delusional beliefs" and showed signs of "magical thinking".

"There is certainly bail concerns," Justice Button said.

Mr James said Almaouie would abide by curfew and other conditions, which would effectively put him under house arrest, and offered to post a $100,000 surety.

Almaouie turned himself into police, has been in custody since January 10, and doesn't pose a flight risk, Mr James said.

Justice Button found there were unacceptable risks Almaouie could commit a serious violent offence and denied bail.

His matter remains before the court.