Includes video report

One lucky Australian family has won an oceanfront house worth nearly $4 million after spending $200 on lottery raffle tickets.

James Burry, 40, was announced the winner of the biggest beach house lottery ever held in Sydney.

The North Manly fire protection worker's prize is a four-bedroom house in Freshwater with uninterrupted ocean views stretching from Manly to Curl Curl.

The newly built home is laced with luxury fittings and sits atop a coastal cliff about five minutes' walk from both Freshwater and Curl Curl beaches.

Mr Burry said winning the house was a shock and he was still adjusting to the sudden change in his family's living arrangements.

"I've got a lot of mates who like pulling pranks, so I thought someone was taking the piss when I first got the call saying I'd won," he said.

"It's a lot to take in. It will probably still take another couple of weeks for it all to settle in."

Mr Burry purchased tickets for the house lottery through RSL Art Union, which holds regular house draws to raise money for veterans.

Ticket prices were $5 and Mr Burry purchased about $200 worth, which went to charity. He beat out other ticket holders who had spent more than $1000.

"I'd actually forgotten I'd entered," he said. "I heard about the draw on the radio and thought I'd buy a couple of tickets because it was going to a good cause."

RSL Art Union general manager Tracy Bishop said the draw was one the group's most successful lotteries.

"Tickets sold out early," she said. "I think the home captured a lot of people's imagination. It's a beautiful home that ticks all the boxes for Sydneysiders and not many properties sell in the area, so it's a difficult location to get into."

Mr Burry said his family had been considering moving to Gosford to help stretch their money further, but will probably stay in the area for good now.

"We know this part of Freshwater well. We used to go to a nearby park to eat fish and chips and soak in the view. It's strange to think we'll be waking up to the same view every morning."

The raffle proved to be particularly popular with peninsula residents living nearby with the majority of ticket holders from Dee Why, Freshwater, Allambie Heights, Manly and Balgowlah.

"More Australians than ever before are turning to prize home lotteries to have a chance at entering the housing market," Ms Bishop said.

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(Click to display full-size in gallery)The family was considering a move to Gosford, but winning the house has encouraged them to stay on the northern beaches.