Heartbroken Olivia Newton-John is selling her 'haunted' home in Malibu after living with the ghost of her missing lover for 18 months.

Three years ago Olivia bought the sprawling oceanfront mansion at Retreat Court, the celebrity-studded colony on the Californian coast, for $6.8 million to share with her boyfriend Patrick McDermott.

The Australian songbird, who turns 60 this year, planned to spend the rest of her life with the cameraman in the spacious Mediterranean-style home.

Only 10 months later Olivia was crushed when 48-year-old Patrick, whom she'd dated for nine years, mysteriously disappeared while on an overnight fishing trip.

'The house has never been the same since Patrick vanished into thin air,' a family insider says.

'For the first few months Olivia would walk into various rooms, especially the master bedroom, and everything would remind her of the man she once loved so deeply. Although she eventually tried to move on with her life, she felt as though the spirit
of her ex-lover haunted the house. She said sometimes it was as though he were still sitting in the living room next to the fireplace, his favourite spot,' the insider says.

'And when her daughter and live-in housekeeper weren't home, Olivia sometimes heard strange noises that made her wonder if Patrick's ghost was stalking the property.'

The insider says Olivia, who attended G'Day USA celebrations with her new love John Easterling, was plagued by concerns that if she sold the house it would be admitting Patrick was dead or never coming back.

'Either way, she realised she had to bury her past and start over with a fresh slate.'

Patrick's disappearance from the fishing boat Freedom has been shrouded in mystery from the start. It's presumed he drowned after jumping overboard while depressed over mounting debts.

But it's also believed Patrick may have faked his suicide to escape a possible jail sentence for failure to pay thousands to his ex-wife, actress Yvette Nipar, for child support for their teenage son.

Following reports he'd been spotted in Mexico's tourist mecca Cabo San Lucas, in June 2006, Olivia held a glimmer of hope that Patrick would one day come back to her.

Later that year, she first considered selling her home - Retreat Court had been the centre of unwanted attention because Britney Spears was living next door and was involved in a bitter split from Kevin Federline.

Olivia, who divorced dancer Matt Lattanzi in 1995, was not only grief-stricken over her lost lover, but was also struggling to help her daughter Chloe Lattanzi, 22, who was battling anorexia.

'The last thing she needed was for attention to be turned on her and her troubled child,' the source says.

The final straw came late last year when the Malibu fires almost burnt down Olivia's home. Although she wasn't home at the time, it was a frightening scare and she vowed to sell as soon as potential buyers forgot the inferno terror.

Olivia, who bought the property from Charles Bronson's widow Kim, has listed the 1976-square-metre home for almost $16 million. That will be a staggering $9 million profit for the blonde beauty in just three years although Britney sold her similar mansion for more than $11 million.

The stunning five bedroom home has six bathrooms, a massive master bedroom with his-and-her ensuites, a family room with bar, an expansive dining room and a chef's kitchen plus a two-bedroom guest house, a spa and a pool.

Olivia, who owns a farm in Australia, is said to be looking for a smaller home in LA to be closer to boyfriend John, the multimillionaire founder and CEO of Amazon Herb Company.

His nickname is 'Amazon John' because the former treasure hunter has been to South America more than 130 times in search of herbal cures for various illnesses.

The couple had been friends for years due to their mutual interest in preserving the environment, but their relationship blossomed into love last July as he helped to mend grieving Olivia's broken heart.

'Olivia's not in a rush to buy a place as she can always stay at John's,' the source says. 'And, in fact, she's so crazy in love again, she may even move in with him full-time.'