This Bizarre Real Estate Photo Got Caught Up in Australia’s AI Image Crackdown

The Australian government mistakenly called out a photograph of an apartment with a seemingly picturesque view of Bondi Beach as an example of an AI-doctored property ad — only to discover the unusual image was real.

The government in New South Wales (NSW), an Australian state, recently introduced new rules targeting the use of AI and digital editing in real estate photography. Under the Residential Tenancies (Protection of Personal Information) Amendment Bill 2025, landlords and real estate agents must disclose when photos in rental listings have been digitally altered or AI-generated in ways that could give renters a misleading impression of a property’s size or condition.

Under the legislation, real estate businesses in New South Wales could be fined up to $15,321 ($22,000 AUD) if they fail to disclose that a property photo has been digitally altered or generated using AI.

However, according to a report by The Guardian, the New South Wales government’s effort to crack down on misleading real estate listings suffered an embarrassing setback after it mistakenly identified an authentic apartment photograph as an example of an AI-manipulated image.

In a media release issued last week announcing new protections against misleading rental ads, the state government linked to a property listing for an apartment in Leichhardt, a suburb of Sydney located about 7.4 miles from Bondi Beach. The photograph showed the apartment’s open-plan living and kitchen area, with what appeared to be a coastal view of Bondi Beach through the window. The government described the listing as an “AI-doctored rental listing in Sydney’s inner west”.

However, the listing agency IB Property disputed the claim that the image had been digitally altered using AI. It turned out that the photograph was genuine, and the apparent beach view was actually a $5,000 courtyard mural depicting Bondi Beach.

A spokesperson confirmed to The Guardian that the photograph showed 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.

“We can confirm that the image has not been altered or digitally generated using AI, Photoshop or any other image-editing software,” the spokesperson tells the news outlet.

“The mural was commissioned and paid for by the landlord at a cost of approximately $5,000, and we can also confirm that there are no plans for it to be removed,” the spokesperson explains, adding that the property was leased in February 2026 and had not been advertised since.

The better regulation and fair trading minister Anoulack Chanthivong whose office issued the media release, didn’t respond directly to The Guardian’s questions about the mistake.