Artificial intelligence has swept through the real estate industry at a frightening pace, with little to no AI regulation. From AI-generated listing photos to automated copywriting, virtual staging, processes, and even AI agents managing agency websites and client databases, the technology has moved far faster than the rulebook.
Until now, there hasn’t been any clear regulation or rule enforcement when it comes to AI. In late 2026, this is all changing, and the penalties for getting it wrong could be significant.
Queensland Has Fired the Starting Gun
There have recently been a number of viral campaigns showing AI manipulated images on property listings. While these have caught the attention of agents and prospective buyers & sellers, it opens up a raft of opportunities for legal claims about a property and what was being purchased.
The hammer has come down hard on these tactics.
In June 2026, the Queensland Office of Fair Trading (OFT) sent a direct email to every real estate licensee in the state.
The message was clear: commencing August 2026, OFT inspectors will conduct state-wide, targeted compliance checks on real estate agents, with a specific focus on false or misleading representations, including those arising from the use of AI and digital enhancements in property marketing.
The OFT simultaneously published a Best Practice Guide: Avoiding Misrepresentations in the Real Estate Industry, which explicitly addresses AI-generated and digitally altered content in property listings.
The maximum penalties under the Australian Consumer Law are $2.5 million for an individual and $100 million for a corporation. These are not hypothetical figures. They are the ceiling against which the OFT’s compliance program will operate.
For Queensland agents, the message could not be more direct. For agents in every other state and territory, it would be a mistake to assume this is someone else’s problem.
This is an early step on the AI regulation path for the real estate industry.
The Legal Framework Already Applies Everywhere
No other Australian state or territory regulator has yet issued AI-specific guidance for real estate marketing. However, this does not mean agents outside Queensland are exempt from the law.
The Australian Consumer Law (ACL), which applies in every jurisdiction, prohibits misleading or deceptive conduct in trade or commerce under Section 18. In October 2025, Treasury’s final review of AI and the ACL confirmed explicitly that Section 18 applies equally to AI-generated and AI-altered content, including property marketing images and written descriptions. The tool or application that created the content is irrelevant. The agency/agent who published it is responsible.
In New South Wales, the existing advertising guidelines for property agents under the Property and Stock Agents Act 2002 already explicitly prohibit agents from modifying photographs so that images no longer truthfully and fairly represent a property, or from digitally removing or adding features. This captures AI-enhanced imagery directly, without any new legislation being required.
The ACCC has signalled that its 2026-27 enforcement priorities will target manipulative and deceptive AI practices, and its December 2025 report on AI developments addressed liability for businesses when AI systems make representations on their behalf.
The regulatory machinery is in place. Queensland has simply been the first to activate it specifically for real estate.
Where Scrutiny Will Land First: Images
When we consider a logical rollout of AI regulation, property photography is the most obvious starting point for regulators, and the QLD OFT guide makes this plain. Digitally altered images are detectable. AI image manipulation leaves traces that metadata analysis and detection tools can identify. More practically, an inspector can simply visit a property and compare what they see with what was advertised.
The OFT guide is explicit about what is prohibited: using AI to remove unattractive features such as powerlines or neighbouring buildings, adding elements that do not exist such as trees or pools, using scenic views that are not real, altering images to make a property appear in better condition than it is, and falsifying physical conditions such as room sizes, layouts, or windows.
Critically, the guide states that even if an agent is unaware that content provided by a third party or generated by AI is inaccurate, they may still be liable. Ignorance is not a defence. If a third-party photography service or AI tool altered an image and the agent published it, the agent owns the consequences.
Beyond Images: What Could Happen Next?
It is worth being clear about what is known and what is not. For now (as of June 2026), the Queensland OFT’s compliance program is focused on property marketing images and written listing representations. No regulator has announced any program targeting AI-generated copywriting, agency websites, or CRM-connected AI tools.
What follows is not a prediction of imminent regulatory action, but a logical observation about where the same legal principles already apply.
The ACL does not distinguish between a listing photo and a listing description, or between a listing description and a service page on an agency website. The prohibition on misleading or deceptive conduct applies to all of them. Agents using AI copywriting tools should be reviewing output carefully before publishing, not because an inspector is likely to audit their words tomorrow, but because the responsibility has always been theirs regardless of who, or what, wrote the copy. “Sweeping ocean views” that do not exist is a false representation whether a human or a language model wrote it.
Similarly, some agencies have moved further still, using AI tools to build and manage their entire public-facing website, and in some cases connecting those tools directly to their CRM. The ACL implications of inaccurate content on an agency service page are no different in principle from those of a misleading listing. No regulator has signalled this as a priority area. But the legal framework does not wait for a compliance program to exist before it applies.
How and when regulators might turn their attention beyond property images is genuinely unknown. What is known is that the existing framework covers more ground than many agents realise.
Your Privacy Policy: The Obligation Most Agencies Are Ignoring
This is arguably the most overlooked compliance issue in the industry right now, and it exists independently of any property advertising regulation.
The Office of the Australian Information Commissioner (OAIC) has published clear guidance on how businesses must handle the use of commercially available AI products. The OAIC states:
“Businesses should update their privacy policies and notifications with clear and transparent information about their use of AI, including ensuring that any public facing AI tools (such as chatbots) are clearly identified as such to external users such as customers. They should establish policies and procedures for the use of AI systems to facilitate transparency and ensure good privacy governance.”
Source: OAIC Guidance on Privacy and the Use of Commercially Available AI Products
This is not a future obligation. It is current guidance from Australia’s privacy regulator, and it has practical implications for real estate agencies right now.
Does your agency use an AI tool that accesses client data?
This includes AI features within your CRM, AI chat tools on your website, or any AI system that processes the names, contact details, communication history, or financial information of your clients, vendors, buyers, or tenants. If yes, your privacy policy should disclose this. If it does not, your privacy policy is out of date.
Does your website include any public-facing AI tool, such as a chat function or automated enquiry response?
Under the OAIC’s guidance, this should be clearly identified as an AI tool to the people using it. Your clients and prospective clients have a right to know they are interacting with an automated system.
When did you last read your own privacy policy?
Many agencies are operating with a template policy that was set up years ago and has never been updated. A policy that makes no mention of AI, automated decision-making, or the specific tools your agency uses is not providing the transparency the OAIC expects.
It is worth noting that the Privacy Act and its Australian Privacy Principles (APPs) apply to businesses with an annual turnover of $3 million or more. Agencies below this threshold may be exempt from the Privacy Act itself. However, the OAIC’s guidance reflects a broader expectation of good practice, and privacy obligations for smaller businesses are under active consideration as part of ongoing legislative reform. More practically, clients and prospective clients do not know or care about turnover thresholds. Transparency about how you use their data is a matter of trust as much as compliance.
If you are unsure what your privacy policy says, find it and read it. If it does not reflect how your agency actually operates today, including any AI tools you use, it needs updating.
A Practical Checklist for Agents
Given the regulatory environment taking shape, here are the questions every agent and principal should be asking now.
Property marketing
- Have all listing images been reviewed to ensure they accurately represent the property’s current condition?
- Has any AI enhancement been used to add or remove features? If so, does the listing include a clear disclosure?
- Do all written representations, whether AI-generated or human-written, accurately reflect the property?
Agency website
- Does your website content accurately represent your agency, its team, its experience, and its services?
- If AI tools were used to build or maintain your website, has this been reviewed for accuracy?
- Are any public-facing AI tools, such as chat functions, clearly identified as AI to visitors?
Privacy and data
- Does your privacy policy disclose how your agency uses AI tools?
- If any AI tool has access to your CRM or client data, is this disclosed to clients?
- When did you last review and update your privacy policy?
The Opportunity in Getting This Right
Compliance conversations are rarely comfortable, but the agencies that take this seriously now are the ones that will be operating confidently when the inspectors arrive, when the ACCC turns its attention to AI practices in the property sector, and when clients begin asking harder questions about how their data is being used.
A professionally built website, with accurate content, clear authorship, and a properly maintained privacy policy, is not just good practice. In the current regulatory environment, it is a competitive advantage.
Real estate is a trust business. The agents who protect that trust, including being transparent about the tools they use and ensuring every representation they make is accurate, will continue to build the kind of reputation that sustains a long career.
The AI tools are not going away. But how you use them, and how accountable you remain for the output, will matter more with each passing month.
Table of Contents
