A New South Wales push against misleading rental ads hit an embarrassing snag when officials flagged a listing as "AI-doctored" because it seemed to show Bondi Beach right outside an apartment window.
The scene was not fake after all. As The Guardian reported, the image showed a real Bondi Beach mural painted on a courtyard wall, commissioned for $5,000.
The confusion underscores how difficult it can be for renters to judge whether online photos reflect what a property is actually like in person.
Here's what to know
As part of its rollout of tougher rules on deceptive rental advertising, the New South Wales government held up a Leichhardt apartment listing as an apparent example of AI image manipulation. IB Property, the agency behind the ad, rejected that claim and said the photo was genuine.
According to the agency, the apparent beach view was actually a mural in an internal courtyard, visible through the apartment's windows.
"We can confirm that the image has not been altered or digitally generated using AI, Photoshop or any other image-editing software," a spokesperson said.
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The image drew attention in part because Leichhardt is about 7.5 miles (12 kilometers) from Bondi Beach.
The new law would require NSW real estate businesses to disclose when property images are AI-generated or otherwise digitally altered, with fines of up to $22,000 for failing to do so. The rules are set to take effect in early 2027.
"Every renter knows the frustration of seeing a property online, only to turn up and find it looks nothing like the listing," Better Regulation and Fair Trading Minister Anoulack Chanthivong said in a statement. "These laws are about putting an end to misleading practices and making sure renters get a fair go. We will always stand on the side of renters."
More background
The wider issue is what some in Australia have dubbed "housefishing," presenting a home in a way that makes it seem bigger, newer, brighter, or more fully equipped than it really is.
That kind of misleading presentation can waste renters' time, distort competition, and add even more pressure to already strained housing markets.
Tim McKibbin, chief executive of the Real Estate Institute of NSW, said that manipulated listing photos are nothing new.
"People were removing trees and removing telegraph poles … clearly that is false and misleading," he said.
Dr. Leah Li, who led an RMIT University report on AI in the property profession, warned that "AI hallucinations can occur when AI-generated images introduce features that were never part of the property," which can fundamentally change a prospective tenant's perception of "size, layout, condition, or amenity."
What's being done?
NSW's legislation extends beyond AI-generated images. It also limits excessive data collection during the rental application process, affecting more than 2.3 million renters.
Standardized application forms will bar requests for personal photos, social media handles, tattoo details, and children's information.
The government also said it should collect sensitive identity documents such as passports and driver's licenses only from the single preferred applicant before lease signing. Penalties for privacy breaches can reach $11,000 for individuals and $49,500 for corporations.
Some renters are already opting out of suspicious listings altogether.
"It feels cheap … lazy and insulting. We just stopped going to AI listings, period. We started asking: 'What are they compensating for?'" said Roxanne Gardiner, a 26-year-old renter in Brisbane.
Where can I learn more?
These stories look at other ways housing listings and rental marketing can mislead buyers and renters.
• In Australia, residents said a real estate agency was bending rules with obnoxious lighting.
• In Germany, an outrageous "nightmare" mansion drew online guesses that the design came from AI.
• In a baffling listing, the home's odd staircase layout left viewers stunned.
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