Phil Collins is listening to his neighbours having sex. In the lyrics he sounds a bit frustrated and alone. The song ends with four subdued oh yeahs. Poor Phil.
This reminds me a little bit of a similar experience I had while sleeping at my then girlfriends house. Her bed was small, so we were lying very close. How we managed doing that I still don’t know. The house was rather noisy, and she had a very sexually active neighbour who was you know, doing his thing.
The experience of lying there in the middle of the night with this couple making noises was kind of… exciting. A couple of months later they were fighting, which was considerably less exciting. And then they broke up. The walls were thin enough to enjoy every step of the evolution of their relationship.