It’s been billed as the year we’ll all get connected and smart products will simplify our lives. In some ways that prediction is proving correct, and the internet infrastructure that drives smart tech is becoming a requirement, not just a desire.
But what does the smart home mean for real estate? Is there appeal and value in savvy tech and the hyper-connected home? And is the smart home soon to be an essential feature for buyers?
A SMART CONNECTED LIFESTYLE
Renowned as the mecca of all things bright, shiny, technical and new, this year’s Consumer Electronics Show in Las Vegas was bigger and bolder than ever before. Over 3,900 exhibitors set up shop, taking up 240,000 square metres of floor space and attracting 184,279 visitors to peruse the latest wares.
Smart home technology was a major focus, with everything from intelligent fridges that are capable of meal suggestions to connected bathroom fittings like toilets and mirrors that boast voice assistants, music playlists and the ability to read you the news.
So prevalent was smart home technology that LG Electronics US marketing vice-president David VanderWaal told those assembled 2018 would be “the tipping point for the smart home and, more importantly, for the smart connected lifestyle”.
In the weeks that followed, Mr VanderWaal’s prediction appeared to be proving correct. After years watching on enviously as the US embraced a selection of smart speakers, Australia finally had access to Amazon Echo, and it came complete with an Australian-accented Alexa.
If that wasn’t enough to get the smart juices flowing, Apple HomePod soon launched, with the tech giant electing a simultaneous release in Australia, the UK and the US.
The year of the smart home is upon us, and the connected lifestyle awaits.
AUSTRALIA EMBRACING THE INTERNET OF THINGS
In May last year technology analyst firm Telsyte released a report encompassing Australia’s adoption of smart home devices and our national embrace of the Internet of Things.
They noted Australian households were in the middle of an Internet of Things (IoT) at home “revolution”, with adoption of smart home devices climbing by 11 per cent between 2016 and 2017.
But that’s just a drop in the ocean of what they predict will occur.
Telsyte tips that by 2021 the smart home market will be worth $4.7bn, up from $377M in 2016. This rise will see 311 million connected devices furiously relaying information within Australian homes, meaning on average each house will have 30.7 connected devices, up from 13.7 in 2017.
Telsyte Managing Director Foad Fadaghi notes that all these devices mean connectivity, and fast internet access is now a requirement rather than an optional extra – and not just in premium homes.
“It’s all about fast broadband, fitout, wiring and speed,” he explains. “And the trend is moving away from just premium houses.”
Mr Fadaghi says a current focus is on retrofitting older homes with smart home infrastructure in the knowledge that buyers will expect their property to be capable of smart home connectivity in the future.
But he also explains Australia is about 12 months behind the US in terms of smart tech adoption.
“We are seeing an uptake of certain technology because of the new availability of smart hubs and virtual assistants. But we expect when smart home adoption really takes off it will be an avalanche that happens very quickly.”
AN INCREASING DEMAND
For national smart home installation company Electronic Living, that avalanche of interest has already commenced. What used to be a premium market now extends right down to the mid-level and beyond, Managing Director Damian Cavanagh explains.
“It used to be high-end residences, but in the last few years that technology has begun to filter down. Smart homes are increasing at an exponential rate. A lot of this used to be considered an optional extra, but now it’s considered essential.”
Mr Cavanagh adds that smart home adoption is particularly prevalent in the construction of new properties, with around 80 per cent of the company’s business coming courtesy of new builds.“In the construction industry and architecture, smart homes are considered an integral component.”
As to whether it increases value, Mr Cavanagh offers a unique insight spanning his previous experience as a real estate agent and as a 10-year veteran in the smart home field.
“I have no doubt that smart home technology adds value. With smart home connectivity, smart devices can control everything in the home, and that’s a definite point of difference.
We have real estate agents who host open homes in the evening so they can demonstrate the lighting control, scenes and moods afforded by smart home technology.”
Meanwhile, he predicts this adoption of smart home technology as the normal rather than the luxury will only increase in the coming years. “It’s a bit like the cars we drive,” he explains, noting how not so long ago keyless entry and connectivity were luxury features of the automotive market.
“Now keyless entry, full climate control and connectivity are entry-level features. And just as they did in the car market, these things will soon become standard in our homes.”
THE REAL ESTATE EXPERIENCE
Within the prestigious housing market of Sydney’s Eastern Suburbs, Jerome Srot of Ray White Double Bay says smart home technology is emerging as a potential selling point. But he also echoes the sentiments that the connectivity behind it is front and foremost in people’s minds.
“We get a lot of buyers asking if a house is wired for NBN. That connectivity is becoming vital,” he says.
And, yes there’s been an increase in smart technology and automation over recent years. “Most homes in the top end of the market, the $8-$10 million range, have some sort of smart automation,” he adds.
Smart features in the upper echelon of housing include full automation of lighting, security, entertainment, climate control and even elements like heated floors, along with keyless entry to the garage and front door.
“It’s certainly an added feature,” Mr Srot notes.
Meanwhile, smart tech is slowly but steadily also creeping down the line. Ray White Double Bay recently marketed a $2 million unit in Bondi fully decked out in smart home tech, and also sold a smart townhouse in Double Bay to a buyer seeking out the specific features of automated security and monitoring.
“The gentleman who bought it was an expat working in Hong Kong. The home automation offered great piece of mind. He can lock up and go, irrigation is automated, and he can monitor it from afar. In that case smart technology was a big selling point.”
As to whether it’s a worthwhile investment for sellers, Mr Srot notes that it depends on the value of the property and the price of automation.
Meanwhile, Mr Cavanagh of Electronic Living explains that the price of entry for the average consumer is dropping quickly and there is greater ability to wirelessly retrofit existing homes. As a result, the attributes of the smart home are proving more attractive.
“When we set up this business 10 years ago, we were definitely considered ahead of the times. We were banging on doors trying to explain the relevance of smart home automation. Now people are coming to us.
“People want to know about smart homes and they want the technology that drives them.”