2018: THE YEAR OF THE SMART HOME

Elite Agent - - CONTENTS - Cas­san­dra Charlesworth

AC­CORD­ING TO THIS YEAR’S CON­SUMER ELEC­TRON­ICS SHOW IN LAS VE­GAS, 2018 is set to be a wa­ter­shed year. With smart speak­ers, smart TVs and smart fridges flood­ing the Aus­tralian mar­ket, Cas­san­dra Charlesworth logs in to in­ves­ti­gate the real es­tate value of the smart home.

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 Aus­tralianac­cented 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.

Adop­tion of smart home de­vices has climbed by 11 per cent be­tween 2016 and 2017.

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

Buy­ers will ex­pect their prop­erty to be ca­pa­ble of smart home con­nec­tiv­ity in the fu­ture.

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 en­trylevel 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.”

By 2021, on av­er­age each house will have 30.7 con­nected de­vices. “We have agents who host open homes in the evening to demon­strate the light­ing con­trol, scenes and moods.”

Fast in­ter­net ac­cess is now a re­quire­ment rather than an op­tional ex­tra - and not just in pre­mium homes.

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