Scrolling through property listings in Europe, you might spot a charming apartment with warm autumn light, tasteful furniture, and a vase of fresh flowers. But look closer: a floor lamp appears to sprout from a table, or the same painting hangs in every room. These are telltale signs of AI-enhanced imagery, a growing practice in real estate that has sparked concern across the continent.
On an Irish housing forum, a user recently posted side-by-side photos: one showing a furnished living room with a sofa, plants, and decor, the other revealing the same space empty and bare. In the AI version, the couch blocks the staircase and the wall appears larger. “AI now being used by estate agents to sell houses. Is this even legal?” the user asked on 22 September.
Real estate agents have long used staging to help buyers envision a property's potential. But traditional staging is costly and time-consuming. AI offers a cheaper, faster alternative—sometimes nearly free. Steven Lee, from the Professional Institute of Real Estate Agents, argues that virtual staging is essentially the same as physical staging, just done on a computer. “Agents already use home staging to make a place look nicer when you visit it,” he said. “So this is basically easier and cheaper to do, of course, on a computer.”
Yet the line between enhancement and deception is thin. AI can make a room appear larger or a kitchen more modern than it actually is, which is especially problematic for buyers relocating to a new city who cannot visit in person. Older people, in particular, may not recognize AI-altered images or even know what a deepfake is.
Claudio Teixeira, head of digital policy at the European Consumer Organization, says AI deception in online marketplaces like housing is under-discussed. “Not everyone has the capability to see at first glance that this is indeed not real,” he said. “So this content needs to have a clear warning that it is AI generated.”
New EU rules aim for transparency
The EU AI Act, which became applicable in early August, may help curb the practice known as “housefishing.” Article 50 of the regulation requires AI-generated or modified content to be labeled. An image of an apartment “furnished using AI” is considered partially AI-modified and must carry a transparency icon.
David Rappenglück, a senior law associate at CMS who monitors the act's application, explains: “Article 50 is more or less an expression of this protection of fundamental rights. The message is basically quite easy: if you, as a customer or a bidder, are confronted with a picture which might be AI generated or manipulated, you should be informed about it.”
Providers of AI systems, such as OpenAI or Anthropic, must embed machine-readable labels in images. Deployers—those who use AI to create or enhance images—must also add a visible label. But if a deployer skips the label, it becomes difficult for an ordinary person to verify whether AI was involved. Akvilė Šikšniūtė, who works on digital policy at the European Consumer Organization, notes that checking requires plugging the machine-readable code into a verification website—a step that is often unclear to consumers. “I think we're still quite far away to the point where the consumers feel that they have places to turn to if they feel like they're misled or the content that they're seeing is not accurate,” she said.
What counts as AI modification?
The AI Act does not distinguish between partial manipulation and full generation, according to Rappenglück. Subtle changes, like adjusting lighting or wall color, might be considered minor and not require labeling. Šikšniūtė points out that this ambiguity can confuse consumers: “I feel like this is where perhaps the misconception comes from for consumers slightly, because we expect now from all the communications we see that all the content will be labeled, and that's not the case.”
Enforcement remains a practical challenge. Non-compliance can result in fines up to €15 million or 3% of worldwide turnover. “We as lawyers would really recommend taking this quite seriously,” Rappenglück said. “There's quite a hard enforcement mechanism and it's also enforced by the national authorities.”
However, because the act only came into force last month, many details are still untested. Property listings often disappear within days, making it hard for regulators to monitor individual cases. Teixeira worries that without active oversight, the practice could persist. “How do you actually ensure accountability of this sector to make sure that these practices do not gain hold? Right now, the apparatus is clear that this is not happening,” he said.
The real estate industry itself is beginning to address AI transparency, but the path forward remains uncertain. As the EU AI Act rolls out, buyers across Europe—from Lisbon to Tallinn—will be watching to see whether the new rules truly protect them from digital illusions.
