Is this not illegal?

You can discriminate in rentals if it is for a room which the advertiser or their family are living in.

https://www.tenants.org.au/factsheet-17-discrimination

Under the Racial Discrimination Act 1975, an act is not unlawful in relation to accommodation if sharing with the owner or their close relative.

Under the Sex Discrimination Act 1984 and the Disability Discrimination Act 1992, an act is not unlawful in relation to accommodation:

if sharing with the owner or their close relative, and if it is for no more than 3 people.

Under the Anti-Discrimination Act 1977, an act is not unlawful:

if the tenant is sharing with the owner or their close relative, and if the accommodation is for no more than 6 people.

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