The smart home market will grow 20% year-on-year to reach $2.1 billion by the end of 2022, according to new research from emerging technology analyst firm, Telsyte.

The Telsyte Australian IoT@Home Market Study 2022 found that more than two-thirds (69%) of Australian households have at least one IoT@Home product in 2022. Around half a million consumers started their smart home journey during the past 12 months and one quarter (26%) of households already have more than five different types of smart home devices.

While the economic environment is putting pressure on budgets for IoT@Home products, consumers still recognise the long-term benefits provided by a ‘smarter’ home with 42% believing it will help reduce the cost of living in the long run.

The top benefits consumers imagine a smart home should provide remain being more energy-efficient, making the home more secure, and cost savings in the long term. Sustainability has also become an important part of the smart home conversation and is now ranked fourth.

Overall interest in smart security products remains high as more workers return to the office. Telsyte expects the segment to grow steadily in 2022 (up 9% year-on-year). Security cameras and smart doorbells and locks are expected to make up the bulk of the segment’s total revenue.

As Australians become increasingly connected, over half (53%) are also concerned that smart home products are becoming targets of cyberattacks and while almost all (97%) have taken steps to protect their online security with selected personal devices, only around two-thirds (64%) have taken measures at the home network level.

Smart speakers have been the starting point for many households’ smart home journeys and Telsyte estimates more than 30% of homes will be using one by the end of 2022. While Google remains the leader in the smart speaker market, Amazon is fast catching up by bundling with other devices and services in the Amazon family.

More availability of smart kitchen, laundry and small appliances is set to make the smart lifestyle category mainstream within the next 12 months. Telsyte forecasts the smart lifestyle segment to grow 38% in 2022 and is on track to become the largest IoT@Home category driven by smart appliances.

The price premium between smart and non-smart appliances is coming down. Smart appliances are now typically around 15 to 25% more expensive than comparable non-smart products, down from up to 50% a year ago.

The study found consumers are willing to pay an 11% premium for smart appliances (19% more among invested adopters). Some of the popular smart appliances include robot vacuum cleaners, smart air treatment devices, washing machines, and connected heating and cooling appliances.