AI alters reality in real estate ads, prompting regulation

The use of artificial intelligence (AI) in real estate advertising is on the rise, with agents using the technology to alter furniture, families, and even create songs about floor plans to sell and rent homes.

Marketing and consumer behaviour academic Sara Thaichon said the property industry was "one of the fastest adopters of AI in Australia".

Virtual staging and 'house-fishing'

Ms Thaichon said "virtual staging" was common in real estate to help prospective buyers imagine the home's potential.

"There's nothing wrong about that if it's done correctly, if the use of AI is disclosed," the Griffith University associate professor said.

But she said using AI to enhance and create a false perception of a property can be considered "house-fishing".

AI-generated images and music

Several examples of AI-generated images have been found on real estate websites around the country, including a lounge room, bathroom, and backyard.

Some real estate websites also feature AI-generated families in property listings, such as a Western Australia advertisement featuring a digitally altered family of four and their dog having a picnic.

A New South Wales agent used AI to turn several properties' floor plans into acoustic songs featuring lyrics such as "stone-top kitchen, gas and grace" and "four rooms full of little dreams".

Regulation and consumer protection

Ms Thaichon said AI songs weren't "a big problem" if the lyrics were factually correct.

Real Estate Institute of Australia president Jacob Caine supported using AI to show a property's potential as long as it was stipulated.

"If you're going to alter the property, be absolutely explicit that you have done and why you've done that," Mr Caine said.

Under Australian consumer law, businesses are prohibited from engaging in misleading or deceptive conduct or making false or misleading representations about products or services.

An Australian Competition and Consumer Commission spokesperson said businesses should ensure AI-generated images do not create an "overall false impression".

Best practice guide

Queensland's Office of Fair Trading (OFT) released a best practice guide in late June to encourage the industry to "enhance responsibly" and "disclose AI usage".

The office outlined that while AI can "showcase properties in their best light", it can lead to misrepresentation.

The regulator received six complaints about digitally altered images in real estate advertising since January 2025.

Mr Caine said the regulation around the country was "fairly opaque" and "blurry" in how the technology was being used, which left room for "exploitation".

He recommended prospective buyers and renters visit a property in person if they are unsure the online listing matches reality.