Introduction: The concept of building automation is not new. Companies selling high price real estate have included automation software for basic tasks in security and reception systems for commercial spaces since the early 2000’s. But given the rate of adoption of sensors and the level of growth of smart technology, there is an expectation that building automation will soon become one of the core components of the real estate and construction industry as automation and robots will cause a reduction in construction time, reduce the level of error in construction, reduce wastage as they will be programmed to optimize their resources available and finally will increase the value of the property
Building Automation: With the home automation and smart home market expected to increase from USD 4.4 Billion in 2013 to USD 21 Billion in 2020, consumers are welcoming more technology into their lives. In fact, smart home technologies are now a desired feature sought out by families looking to purchase a house and for companies looking to establish a new office space. The increasing capacity of IoT devices is one of the major driving factors behind the implementation of technology based smart buildings. Real Estate Business Review estimates that about 10-40% of the devices implemented in IoT will be a part of building automation for commercial and residential purposes. Sensor deployment in the sector is likely to grow at a compound annual growth rate of 78.8 % between 2015 and 2020 to nearly 1.3 billion. Although the primary demand driver for IoT technology is the adoption of sensors for data collection and analytics, the main devices implemented will be wearable technology and smart appliances which are capable of being controlled by a single central device. Companies working with sensor technology have already begun offering wireless integration solutions for home automation including sensor systems for appliances, electronics and security systems. The growing adoption of sensor technology combined with artificial intelligence is leading to creation of robots which can work, or be programmed to work on construction at much faster speeds and with much better effectiveness than human labor and for smart home solutions which are capable of serving the occupants of the buildings for specific tasks. The integration of machines will lead to better made, more sophisticated buildings where HVAC (Heating, Ventilation and Air Conditioning) will become a standard feature. Improved security systems will be able to differentiate residents from strangers as well.
Market Scenario: Statistics indicate the priority levels for individuals that are the upcoming customers for the real estate sector on preference of their homes:
Safety is the highest motivating factor to purchase smart home tech. Nearly 68 % of homeowners want smart tech to become more energy efficient. Millennials desire smart tech to make their lives more convenient. Baby Boomers use smart tech to add value to their homes. Around 45 % of homeowners save money, thanks to home automation, averaging more than USD 1100 per year. The changing market paradigm is due to increased adoption of technology from the baby boomer generation indicating that even the elderly population believes in understanding the benefits offered to technology. The homeowners of the future which will belong to the millennial generation are comfortable with the integration of technology into their everyday life and the most important aspect being the automation factor which is believed to boost home value.
Competition Scenario: Some of the key manufacturers involved in the market for smart technology solutions are Siemens AG, United Technologies Corporation, General Electric Company, Schneider Electric, Honeywell International, Inc., Ingersoll-Rand PLC, Johnson Controls, Inc., ABB Ltd., Legrand S.A. Acquisitions and effective mergers are some of the strategies adopted by the key manufacturers.
Opportunity: There is a clear opportunity for the upcoming building automation sector to make a growing contribution into real estate. The commercial and residential properties of the future will have a large amount of smart technology either already integrated or will have the capacity for integration of IoT. The implementation of this technology will likely be a standard in buildings in the upcoming 5 to 15 years with more adoption of IoT only speeding the process. This presents an opportunity for developers in growing economies that have a higher amount of individuals with disposable incomes to bring in the smart homes of the future as the technology is not commercial yet it has exclusivity and hence commands a premium for its level of sophistication. The added advantage of smart homes being poised to be worth over USD 4 Billion by 2020 will result growth of the smart home market for individual homes as well as for smart residential apartments coupled with sophisticated custom made offices. The introduction of AI into the building automation sector can lower costs and increase the customer value effectively generating higher profitability for the commercial and real estate sector.
Key Factors Considered in the Report:
Real Estate Market Research Reports
Real Estate Industry Analysis
Market Research Reports for Real Estate
Real Estate Industry Research Report
Real Estate Market Research Reports Consulting
Real Estate Business Review
Real Estate Industry Research and Market Reports
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Ankur Gupta, Head Marketing & Communications