A New South Wales government media release used a rental listing as an example of an “AI‑doctored” ad; the listing showed a commissioned Bondi mural on an internal courtyard wall and the agent says the photo is genuine.
The NSW government linked to a Leichhardt rental listing as an example of an AI‑doctored ad, but the image shows a commissioned courtyard mural and has not been altered, the agent says.
New laws due in early 2027 will impose fines up to $22,000 for failing to disclose digitally altered or AI‑generated property images to address ‘housefishing’.
Surveys and research referenced in reporting show low public trust in AI outputs and a lack of sector‑specific AI frameworks for property professionals.
Wales government announced new protections against misleading rental advertising and, in its media release, linked to a Leichhardt apartment alleged to show an "AI‑doctored" image. The listing actually shows an outdoor mural of Bondi beach painted on an internal courtyard wall. The listing agency, IB Property, says the photograph is authentic and unaltered.
The image highlighted by the government purportedly demonstrated how AI can create deceptive coastal views. When checked, the unit's windows look onto a mural of Bondi beach commissioned by the landlord. IB Property confirmed the mural cost about $5,000, remains in place, and the property was leased in February 2026 and has not been re‑advertised since.
Government response and the new law
Anoulack Chanthivong, the NSW better regulation and fair trading minister, framed the legislation as tackling misleading practices so renters do not turn up to properties that bear little resemblance to listings. The laws targeting digitally altered or AI‑generated images will carry fines up to $22,000 for real estate businesses that fail to disclose such edits. The regulations are scheduled to take effect in early 2027.
The government's example was intended to illustrate the problem of "housefishing"—digital alterations that misrepresent size, condition, views or features. Using a genuine photo as an example of manipulation undermines the clarity of enforcement messaging and risks confusing agents and renters about what constitutes deceptive advertising.
Tim McKibbin, chief executive of the Real Estate Institute of NSW, said generative AI complicates pre‑existing digital enhancement practices such as those done with Photoshop. He and others draw a line between virtual staging that suggests possibilities and edits that rewrite reality. Stewart Bunn of First National Real Estate pointed to past cases where AI‑generated images showed nonexistent schools or renovations, asserting that if a buyer would be surprised on arrival, advertising has gone too far.
An RMIT University report led by Dr Leah Li, funded by the Australian Property Institute, identified a lack of sector‑specific AI frameworks for responsible practice in property professions. A 2026 Cotality study cited in reporting found only 40% of Australians trust AI‑generated outputs, compared with 62% in Canada.
With consumers growing frustrated over AI-altered listing photos, it may behoove agents to start adding disclosures when AI is used — if they don’t already.
Listing sites are littered with homes with fake fireplaces, improved views and virtual landscaping, raising false advertising concerns.
New NSW rental rules will put new limits on the information landlords can collect from prospective tenants and require greater transparency around the use of AI in listings.
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