Smart home market to eclipse $5bn by 2027 despite cost of living pressures

Even though Australians are facing solid cost of living pressures our interest in smart home technology is set to propel the industry to crack the $2.5bn mark this year and exceed $5bn by 2027.

The Telsyte Australian Smart Home Market Study 2023 has found the smart home market in Australia is being driven by the demand for energy efficiency, convenience and security.

Nearly half (48 per cent) of adopters have five or more types of smart home devices but feel the current offerings are not quite smart enough, according to the Telsyte study.

The research found cost of living pressures overshadowed the benefits of creating a smart home with more than half (59 per cent) of those interviewed for the study saying they are under increasing financial pressure.

But despite cost of living pressures, the study showed the move to smarter homes will not slow down.

Today nearly one third of households have five or more smart devices.

Creating a connected living environment has sparked interest with smart appliance vendors who are enabling their air conditioners, washing machines and fridges to fit in with a smart home lifestyle.

Already one in five households (18 per cent) have a robot vacuum.

Rising energy prices is also putting pressure on Australian household budgets with 74 per cent saying their energy bill increased in 2023.

Apart from saving money and energy, the study showed that 28 per cent of households also want to be more environmentally friendly with smart energy solutions and more considering going solar and adding storage batteries.

The trend is also reaching the garage with high fuel prices steering more people to EVs,

Tesla is still the runaway leader in sales but as more EV models come to market at more affordable prices expectations will grow and will become more popular with potential buyers.

Telsyte has found there is a move from the connected home to AI-enabled smart living thanks to the hype around generative AI and technology like ChatGPT.

“Australians will increase the look for him AI powered smart living solutions that offer convenience, personalization and enhanced functionality,” says Telsyte managing director Foad Fadaghi.

AI voice assistants are cutting through in the market and 60 per cent of consumers think AI can effectively manage their smart home better than they can.

The report also found 43 per cent of people want a smart home that has advanced AI capabilities that enable natural language communication to automate complex tasks.

Telsyte’s forecast is for the smart home market to be worth more than $5 billion by 2027 with the introduction of more expensive smart home products including smart batteries and smart appliances.

In fact, smart appliances could account for a third of all appliance revenue by 2027.

Smart speaker adoption has plateaued, but AI-powered experiences are set to be the next big thing.

Google is reportedly adding generative AI capability to Google Nest smart speakers which are already the leading smart speakers in more than half of Australian households.

Another factor increasing our smart home adoption is smart security surveillance and smart home care with the view to put smart devices to work to help those with disabilities and in aged care and not just for entertainment.

They Telsyte report found that 1.6 million (16 per cent) households have seniors or members with a disability who need special assistance or care.

The report found this 31 per cent of houses have security surveillance systems while self-monitored online security systems make up about half of the installed base.

Smart security video cameras with increased AI features continue to be popular in 2023 with the market now worth more than $330 million in Australia.