In a media release on Friday announcing protections against misleading rental ads, the state government provided a link to a property in Leichhardt, claiming it was an “AI-doctored rental listing in Sydney’s Inner West”. But the listing agency IB Property denied the images were altered. A spokesperson confirmed the photograph shows a mural of Bondi beach on an internal courtyard wall visible through the unit’s windows, rather than a false digital depiction of coastal views.
Leichhardt is about 12km away from Bondi beach. When Guardian Australia visited 2/14 Norton Street, the artwork was not visible from the street. IB Property explained the mural sits within an internal courtyard and provided photos taken inside the unit confirming it remains in place.
The better regulation and fair trading minister, Anoulack Chanthivong, whose office issued the media release, didn’t respond directly to questions from Guardian Australia, but did issue the following statement: “Every renter knows the frustration of seeing a property online, only to turn up and find it looks nothing like the listing. We will always stand on the side of renters.” Despite the mix-up, the new laws target an increasing market issue. Under the legislation, real estate businesses in NSW will face fines of up to $22,000 for failing to disclose digitally altered or AI-generated property images.
The bill targets the rapid rise of “housefishing” – where digital alterations distort the true size and condition of a home. Chanthivong said the new laws would establish strong protections against misleading property marketing and support ethical AI use. The regulations take effect in early 2027.
The legislation arrives as generative AI embeds itself in property marketing nationwide. Tim McKibbin, the chief executive of the Real Estate Institute of NSW, said generative AI complicates pre-existing digital enhancement in the industry. Stewart Bunn, of First National Real Estate, said consumer trust is being tested by poor industry examples, referencing a 2024 instance where an LJ Hooker branch used AI to generate a listing with nonexistent schools.
Public confidence remains fragile: a 2026 Cotality study showed only 40% of Australians trust AI-generated outputs, compared with 62% in Canada, 52% in the US, and 46% in the UK. Dr Shuai Wang, a research fellow at the University of Queensland, said generative AI systems prioritise visual appeal over accuracy. In real estate, this can manifest as “hallucinations”.
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