The medal-winner’s father Tim said it was a ‘great atmosphere’ as friends joined the family for the event.
Unable to travel to Japan Lee’s parents Helen and Tim invited everyone round to their home in the city to watch the nail-biting conclusion of the synchronised 10 metre platform competition.
Mr Lee told the PA news agency: “Wow. I’m stunned.
“We had a crowd round of about 10 or 15 watching in our garden. It was a great atmosphere.
“It was exceptionally close. The Chinese we know how incredibly good they are. So to beat them is a thing in itself. It was close but the boys did it.”
Mr Lee said his son would watch Daley compete when he was very young and said: “I don’t think he would have believed that one day he would be stood next to him on the 10m board at the Olympics”.
But he said there are “two Toms in his life” as Lee’s biggest inspiration to take up diving at the age of six or seven was his big brother, Tom, who was also a competitive diver.
Lee trains at the John Charles Sport Centre, in Leeds, which has been the home of a string of Olympic heroes over the last decade.
On Monday, City of Leeds Diving Club said on Twitter: “OH MY GOD!!!! @mattydiver OLYMPIC CHAMPION with synchro partner @TomDaley1994. That was amazing!!!!”