Definitely not normal. Is it the usual three monthly inspection or is it the first one, because that might be different. It might be for an entry report. Of course the other scenario might be that the place is being put up for sale, or to be re let, but if that is the case taking pictures of the interior of a tenanted place without the permission of the tenants is a definite no no, at least it is here in Queensland, don't know about other States but I would be surprised if it was allowed. Outside pictures would be a different matter I think.
I think it would be 'normal' yes, especially at the beginning of a tenancy. Perhaps half way through as well would still be OK and of course at the end, especially if there is going to be a claim for some bond based on the property's condition.
Privacy legislation applies but it really only relates to the photos being put on public display (as would be the case on the internet where the property is being offered for sale). This is clearly not the case if the photos are only being stored at the REAs office/computer systems for filing purposes.
Of course our PM takes pictures. She only photographs faults that require attention, or items recently installed, or repairs done etc. As they say, a picture is worth a thousand words and helps us to understand exactly what the issue is.
As neither the PM nor I are remotely interested in the tenant's possessions these are never in the pictures.
our PM takes photos of inspections but she informs the tenants of her intentions too. She avoids photographing tenants possessions, but I expect to know how the property is being maintained. I suggest that you put anything personal out of sight when the agent comes to call.