Smart Buildings - Impact & Implications
Smart technologies are being rapidly adopted in homes and commercial properties across the country. Properties are no longer just one-way passive receivers of energy and information anymore. They are now generators and distributors of energy and data to others. As more smart technology is used, greater data is collected, and more useful technology can be created.
The smart building market is forecast to grow to $51.44B USD globally by 2023.
The boundaries of the physical footprint of a home are being expanded like never before by technology. Features that were once only found in expensive homes are already drifting down to less-expensive homes as the technology gets cheaper, more accessible and easier to operate. “Digital butlers” such as Amazon Echo/Alexa, Google Home and Apple Home (which are able to control lights, locks, air conditioning, music, security etc.) are already widely accepted and used globally and in New Zealand.
Houses with smart technologies are likely to become more desirable as the technology moves to the mainstream. Developers and builders placing these smart technologies in new builds need to ensure that they are providing real enhancements and benefits, potentially by providing fully integrated smart home solutions, to avoid potential frustrations from users.
There are two critical factors for new builds when it comes to smart homes, the first being specific features that consumers want right now - such as multi-room music, wireless networks, lighting, security and air conditioning control. The second critical factor for new builds is infrastructure wiring to support future needs that a consumer may want to include in their home – such as outdoor speakers, additional TVs and other amenities that may come out in the years to follow.
A key factor for the real estate industry in staying abreast of developments in smart technology to ensure agents can correctly prepare a CMA for a property i.e. understand which technologies add value to a home, how much they add and to whom, as some technologies may only appeal to certain segments of the market. While consumers seem to largely be moving towards a more accepting mindset of smart technology, there is still some apprehension around voice-activated controls, for fear of being overheard or listened in on. Overall, there is a cost-benefit analysis that each individual will weigh-up with convenience potentially out-weighing concerns.
It is also important that agents accurately portray the current technology, how it works, and how well it works, to prospective buyers. Home-staging may need to include the staging and demonstration of the smart technology in the home, as simply knowing it exists in the home will not be enough to convince buyers. Preparing a smart home for sale will require the understanding and explanation of the potential privacy concerns that customers may have as a result of the sharing of data from a smart property.
Smart technologies also place different requirements in facilitating the handover of a property from seller to buyer e.g. ensuring all of the passwords are either passed on to the buyer or able to be reset; and ensuring that the buyer is confident that the seller cannot gain access to the property after the sale via the smart technologies.
The same is true for the commercial sector in terms of understanding how smart technologies in commercial properties can create value, and in some cases additional revenue streams e.g. through efficiency, enhanced building performance, better portfolio risk management and liquidity and better identification of, and delivery to, the needs of tenants. Smart technology in commercial buildings can save a lot of money when it comes to efficiency and overall operation. “Internet of Things” sensors along with other hardware, are able to predict and alert building managers to required maintenance, giving a report on the state of the building and all the equipment in it. It also utilises similar technology to smart homes when it comes to building security – with the ability to check in straight away to a live-feed of what is happening in the building and activate various safety measures from a distance.
Many considerations need to be given as we move into a smarter world, but done right, it will mean a more convenient lifestyle for all.