Lighthouse keeper's cottage a beacon in Vaucluse

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The 1881 Vaucluse lighthouse keeper's cottage, perched on the clifftops overlooking the ocean near South Head, has been listed for sale with $8 million expectations, although it failed to sell for $7 million when it was marketed by McGrath in a more buoyant market in early 2008.

The 2,600-square-metre leasehold property been listed by Steven and Carmen Davidson, who bought it from neurosurgeon John Matheson and wife Jeanne Eve for $2.52 million in 2002.

The 125-year lease cost $820,000 in 1992 when sold to the Mathesons by the Commonwealth government.

The lease will expire in 103 years.

Towering over the four-bedroom Old South Head Road cottage is the 1883 lighthouse, which replaced the 1818 Francis Greenway-designed lighthouse that had been Australia's first lighthouse.

Ray White Real Estate agent James Hundt says the heritage-listed cottage has been extensively renovated as a family home by the heritage architect Clive Lucas.  But Hundt envisages the offering, which sits on a 2,600-square-metre block, could be suitable for a commercial enterprise such as a reception centre.