I’ve been watching agents experiment with AI photo tools for the past year, and I’ll be honest—some of what I’m seeing makes me nervous. Not because the technology isn’t impressive (it absolutely is), but because too many people don’t understand where the ethical line sits.

Last month, I saw a listing in Bondi where the agent had used AI to completely remove a neighbour’s extension that blocked harbour views. The property sold for $3.2 million, and the buyers were furious when they turned up for settlement. That’s not clever marketing. That’s grounds for rescission under Australian Consumer Law, and it’s exactly the kind of thing that damages our entire industry’s reputation.

But here’s the thing: AI photo enhancement isn’t inherently problematic. Used properly, it can help buyers see a property’s true potential without crossing into misrepresentation. You just need to know where the boundaries are.

What’s Actually Legal (and Smart)

Twilight Conversions

This one’s a no-brainer for me. Taking a daytime photo and converting it to a twilight shot is completely fine, as long as you’re honest about it in the caption. Every property looks better at golden hour—why should only vendors who can schedule evening shoots benefit?

I use BoxBrownie for most of my twilight conversions. They’re Australian-based, understand our market, and the results look natural. For a three-bedroom terrace in Newtown, twilight shots can add genuine appeal without changing anything material about the property.

Virtual Decluttering

If a vendor’s home is cluttered but they can’t or won’t stage it properly, AI decluttering is perfectly acceptable. You’re removing distractions, not adding features that don’t exist.

The key test I use: Could the vendor reasonably tidy this themselves? If yes, AI decluttering is fine. If you’re removing structural issues or permanently fixed items, you’ve crossed the line.

Basic Enhancement

Brightening dark rooms, correcting white balance, straightening horizons—this is just good photography. AI tools make it faster, but it’s no different from what professional photographers have done in Photoshop for years.

Where You Need to Be Careful

Virtual Staging

This is where most agents get themselves into trouble. Virtual staging is legal, but only if you’re completely transparent about it. Every single staged photo needs a clear disclaimer: “Virtually staged” or “Furniture digitally added for illustration purposes.”

I worked with AI consultants Sydney last year to set up proper workflows for this, and their advice was crystal clear: if a buyer could reasonably believe the furniture is real, you need a disclaimer on the image itself, not just buried in the listing copy.

For a vacant two-bedroom apartment in Pyrmont, virtual staging can help buyers visualise the space. But if you don’t label it clearly, you’re opening yourself up to complaints under Section 18 of the ACL—misleading or deceptive conduct.

The Absolute No-Go Zone

Never, ever use AI to:

• Add or remove structural features: Windows, walls, extensions, views
• Change the property’s actual condition: Hiding cracks, water damage, or wear
• Alter the surrounding environment: Neighbour’s properties, nearby developments, parking
• Misrepresent size or layout: Widening rooms or removing built-in wardrobes

I don’t care how good the AI is. If you’re changing material facts about the property, you’re breaking the law. The ACCC takes this stuff seriously, and one complaint can trigger an investigation that’ll cost you far more than the commission on any sale.

Tools I Actually Recommend

For agents who want to use AI responsibly:

• BoxBrownie: Australian company, great for twilight, virtual staging, and day-to-dusk conversions
• VirtualStaging.ai: Fast turnaround, but make sure you add your own disclaimers to the final images
• PhotoUp: Good for basic enhancement and sky replacements (though I’m cautious about dramatic sky changes)

Whatever tool you choose, establish a clear workflow with your team. Who’s responsible for adding disclaimers? Who reviews photos before they go live? How do you handle vendor requests to “fix” things that shouldn’t be fixed?

The Bottom Line

AI photo tools can absolutely improve your marketing. They can help vendors present their properties in the best possible light, and they can help buyers visualise potential.

But the moment you start using them to hide problems or create false expectations, you’re not just risking your reputation—you’re risking your registration and exposing your vendor to legal action.

I’ve been in this industry for 25 years, and the fundamentals haven’t changed: buyers need accurate information to make informed decisions. AI should enhance how you present accurate information, not help you obscure it.

Sydney’s market is competitive enough without agents cutting corners on photo ethics. Do it properly, label everything clearly, and you’ll build the kind of reputation that brings repeat business for decades. Skip the shortcuts, and you’ll eventually find yourself answering to the ACCC.

Your choice is pretty simple, really.

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For more guidance on AI tools in real estate marketing, the REINSW regularly updates their professional standards guidelines, and Domain’s Agent Toolkit includes case studies on photo ethics.