Homicide detectives had no choice but to allow an orphaned schoolgirl to live with her uncle for about 15 months after they believed he had killed her family.

Yesterday, after Lian Bin ''Robert'' Xie, 47, was arrested over the five murders, the officer in charge of the investigation revealed that Mr Xie had emerged as the prime suspect about six months after the killings in July 2009. But without sufficient evidence to charge him, the girl remained in his care. However, they did keep him under constant physical and electronic surveillance.

''We had that real delicate situation where she was living with him and we couldn't confide in her,'' Detective Inspector Chris Olen said.

''That was the difficulty in having someone very, very close to him but not having sufficient evidence to make an arrest.''

Mr Xie's ''fondness'' for his niece and the fact that she had been overseas when her family was killed led them to believe she was safe in the home of Mr Xie and his wife, Kathy Lin, who was not a suspect, Inspector Olsen said.

The schoolgirl's parents - Min ''Norman'' Lin, 45, and Yun Li ''Lily'' Lin, 43 - her brothers aged nine and 12, and an aunt, Yun Bin ''Irene'' Yin, 39, were found dead in their home in Boundary Road, North Epping, on July 18, 2009.

The high school student, who was 15 at the time, was on a study trip to New Caledonia.

The brutal killings sparked one of the largest homicide investigations in NSW history. Inquiries extended to China.

There was a breakthrough last May when significant forensic evidence - not a weapon - was found at Mr Xie's home. Testing took ''a number of months'', Inspector Olen said.

The homicide squad commander, Peter Cotter, said Mr Xie was surprised but ''quite stoic'' yesterday morning when officers arrested him at his home in Beck Street, North Epping - a couple of hundred metres from the house where he is alleged to have committed the crimes.

Superintendent Cotter said police were ''very confident that this person acted alone and we are very confident that today we have our man.

''To have two people commit such an act, to have two people with meeting of the minds to complete those actions is beyond anyone's wildest dreams.''

Min Lin operated a highly successful newsagency near Epping railway station. Mr Xie, who had been a successful ear, nose and throat specialist in China, had struggled to establish himself in Australia. He and his wife took over the running of the newsagency after the deaths.

''It's a very primaeval act, in my opinion, and I think it's got to have its origin in greed and jealousy, and probably in modern-day terms that equates somewhere along the line to money,'' Superintendent Cotter said.

He said the young boys might not have been intended victims.

''There is some evidence that the two boys might have woken and there might have been some interaction between the accused person and the two boys,'' he said.

Superintendent Cotter said the girl was surprised when told of her uncle's arrest.

The girl, Mr Xie's wife and Mr Xie's young son were being well cared for, he said. Min Lin's parents, Yang Fei Lin and Feng Qin Zhu, are in China but have been told of the arrest.

Mr Xie did not appear at Parramatta Local Court and did not apply for bail.

He will face Central Local Court on July 1.