Once known as a slum and the place where arriving convicts settled, The Rocks has a colourful history. It was established soon after the colony was formed, and many of the original buildings were made from local sandstone - from which the area gets its name.

Michael Collins, owner of The Rocks Walking Tours, says a key reason for the area's popularity is that it is where the city of Sydney began.

"This is where the Brits displaced the Aboriginal people and Sydney started," he says. "People from all over the world can not only see the oldest buildings in Australia, but walk among them as well. There are not too many places you can do that."

The historic laneways and buildings that lie in the shadow of the Harbour Bridge are a key feature of the area today, but the situation could have been much different. In 1968 the state government issued an order to demolish all original buildings to make way for new developments, with a "green ban" ultimately saving them from destruction.

Collins says despite the suburb's long history a village atmosphere remains, helped by regular events such as The Rocks markets, held three days a week. "This helps the area retain a community feel, especially among the people who work and live here," he says.

Most of the attractions can be reached on foot and there are plenty of places to learn about the area's history, such as the oldest house in The Rocks, Cadman's Cottage, built in 1816; and Dawes Point Battery, the first fortified position in NSW.

Even many of the places to eat and drink are steeped in history. The Rocks claims two of Sydney's oldest surviving pubs: The Lord Nelson Brewery Hotel, which still brews its own beer, and The Fortune of War. There are many others within walking distance that have their own distinct features. The view from the Glenmore Hotel's rooftop, for example, is one of the best in Sydney, providing unrivalled glimpses of the Sydney Opera House. And if it's dancing you're after, the iconic Rocks hot spot, The Argyle, provides regular live music and entertainment.

Newer restaurants and bars are also bringing in the crowds. Quay is one of the most recognised and awarded restaurants in Australia, and provides spectacular views of Circular Quay, the Opera House and Harbour Bridge; Sailors Thai has been satisfying patrons with its spectacular curries for many years. Meanwhile Cruise Bar, on the lower level of the Overseas Passenger Terminal, is a popular place to eat, drink and gather while taking in the harbour views.

Businesses also add to the neighbourhood's "buzz". Collins says a number of advertising agencies have moved into warehouses, contributing to a more modern feel. "The amazing thing is, there are places here that most don't know exist," he says. "Foundation Park off Gloucester Walk is one secret place that few know about."

Residential accommodation in The Rocks is extremely limited, but a mixed-use development by Golden Age Group, The Harrington Collection, is being designed to complement and respect The Rocks' heritage. Managing director of Golden Age Group, Jeff Xu says, it's a boutique development, which is unusual in the city.

"The Rocks is a prime location with very limited supply; to own a piece of The Rocks offers a sense of history and value that cannot be replicated anywhere else in Sydney," says Xu. "Its uniqueness is very appealing."

The low-rise project will consist of 58 dwellings across three buildings, including two new low-rise buildings and a restoration of the heritage-listed "Baker's Terrace", consisting of two residences, built in the 1880s. The project will also include office and retail space, and a new laneway connecting Harrington Street to Gloucester Street.

CBRE agent Ben Stewart says the project is perfect for owner-occupiers.

"These residences include a mix of one, two and three bedrooms," Stewart says. "We also have super prime apartments or penthouses that are anywhere from 218 to 349 square metres, including two with their own private pool."

Another unique element is the views. "Every resident will have access to a communal rooftop with unparalleled views of the Harbour Bridge and Sydney Opera House," Stewart says.