Realty Rolls into the Age of Smart Homes
Smart home automation gives benefits like access control, energy efficiency, safety, and simplifying daily tasks
Technology is disrupting our lives like never before. Take for instance the automobile industry which is witnessing radical transformation with conventional engines being replaced by environment-friendly and economical electrical ones to the extent that such vehicles are addressed as Electric Vehicles or EVs. Similarly, in recent times, the wristwatch landscape has seen the emergence of smartwatches that have helped extend the relevance of watches from my time check reference to that of one providing entertainment, healthcare-related intelligence, security – all these while offering a high degree of customization.
The above reflects the overall ecosystem is rapidly moving towards a consumer technology-driven lifestyle. And it is here that the residential real estate industry which till now has largely been known on aspects such as amenities or quality of construction finds a mention as smart home stands to trigger a wave of new-age value proposition to home buyers over the fundamental premise of offering connected homes.
For beginners, smart home automation can be over wired or wireless connectivity. Conceptualised over the Internet of Things or IOT as popularly referred to, smart home automation enables benefits spread over multiple aspects. A McKinsey whitepaper on smart home automation rightly points its value proposition as comprising of home intelligence, entertainment, access control, home comfort, connectivity, energy efficiency, wellness, home safety, and simplifying daily tasks.
Typical applications offered over smart home automation include customized control of home lighting, the connected framework of home appliances so that they can be monitored and controlled even while being away, connected safety mechanism, control of electric appliances as well as gardening tasks. With the advent of voice assistant-based devices, smart homes have further gained a higher appeal quotient on the aspect of convenience and personalized touch. Popular smart home devices are motion alarm detectors, smart security cameras, smart light devices, smart fans, thermostats, and smart locks.
In India too smart home automation is gradually gathering pace. Publicly available data shows that the Indian smart home automation market is estimated to grow at a CAGR of 29.8 percent during the period 2019-2026 to reach a size as high as 13.5 billion dollars. And here lies the huge opportunity for the Indian real estate industry to garner a significant pie of this market.
Firstly it offers real estate developers an avenue to attract premiums attributed to the enhanced value proposition to buyers. Again publicly available data suggests that buyers are willing to pay about a 5 per cent premium for smart homes as compared to general rates prevailing in the neighborhood under consideration. For buyers, it works in their favor as either they can make the most of the smart home lifestyle or if bought as an investment option, they can rent it out at a higher premium thereby materializing a higher return on investment (ROI).
And coming back to the pandemic times we live in, smart homes can ensure a higher level of safety and well-being thereby acting as an efficient shield to pre-empt any undesired eventualities. Also for those locked down under WFH mode, smart homes score well on ensuring a seamless business as usual continuity by allowing the user to focus on work and leave the automated system to take care of daily chores.
Ever since last year, the world has witnessed many industries at the crossroads of an inflection point. Those with a futuristic mindset have been able to navigate the tide well. Smart Home Automation is one such inflection point invoking accelerated growth avenues for the real estate industry in India. Early adopters who align it well to their overall brand promise to home buyers should go a long way to expand their market premium and thereby overall valuation.
The author is Director, Ajmera Realty & Infra India
DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organization directly or indirectly.