Smart Homes Buildings Market Outlook:
Smart Homes Buildings Market size was USD 121.7 billion in 2024 and is estimated to reach USD 409.2 billion by the end of 2037, expanding at a CAGR of 11.7% during the forecast period, i.e., 2025-2037. In 2025, the industry size of smart homes buildings is assessed at USD 135.5 billion.
The production of smart home building technologies is influenced by the supply chain of raw materials and specialized components. North America and Asia Pacific are experiencing an increasing shift toward vertically integrated models. The in-country assembly and system integration are more favored in these regions to reduce logistical costs. The International Trade Commission (ITC) states that the imports of smart building-related components, including HVAC controls, automated lighting systems, and IoT-enabled sensors, in the U.S. increased by 18% between 2022 and 2024. This underscores that the U.S. highly sources hardware components from overseas for the final assembly of smart home solutions.
Also, the Census Bureau states that the domestic manufacturing of smart home automation devices registered a 9.5% rise between 2023 and 2024. This is highlighting a strong move toward reshoring final assembly operations. Similarly, the Ministry of Economy, Trade and Industry (METI), Japan, noted a 22% year-on-year rise in the export of building automation modules in the first quarter of 2024. This high demand was from Southeast Asia and Europe. All the above statistics underscore that the global smart home buildings market is expected to increase at a significant pace during the projected timeframe.
Smart Homes Buildings Market - Growth Drivers and Challenges
Growth Drivers
- Government-driven green building incentives: Governments worldwide are promoting energy efficiency in buildings through financial incentives, tax rebates, and mandatory efficiency codes. This is estimated to fuel the production and commercialization of smart home technologies during the foreseeable period. According to the International Energy Agency (IEA), investments in energy-efficient buildings increased to USD 380.5 billion in 2024, largely due to policy measures in regions such as the EU, Japan, and North America. Furthermore, Japan’s Ministry of Economy, Trade and Industry (METI) rolled out the Net Zero Energy Building (ZEB) initiative, which is expected to accelerate the adoption of smart HVAC, lighting, and energy control systems in the years ahead. Also, the companies aligning with recognized standards such as LEED and BREEAM are likely to benefit from increased procurement opportunities and regulatory compliance incentives during the forecast period.
- Urbanization and smart city initiatives: The rising global population and urbanization are creating high-earning opportunities for smart home building technology producers. The United Nations study reveals that by 2050, the total population worldwide is estimated to increase by 68.1%. Considering this estimation, it is likely that the sales of smart home solutions are poised to register an upward tick. Additionally, the rising government spending on smart city initiatives is projected to fuel the use of smart building technologies in commercial and residential settings. India’s Smart Cities Mission is representing a tremendous growth in the revenues of key players. Manufacturers are also increasingly investing in R&D to enhance their offerings.
Technological Innovations in the Smart Home Buildings Market
The technological advancements are set to double the revenues of smart home building technology manufacturers during the projected period. The swift integration of digital technologies in industrial and urban sectors is estimated to propel the demand for smart home solutions in the coming years. Advanced sensors, 5G, and blockchain are enhancing the operational efficiency of the smart home solutions. The table below reveals the current technological trends and their outcomes.
|
Technology |
Industry |
Company Example |
Use Case |
Result/Impact |
|
5G Connectivity |
Telecom |
Verizon |
Smart building device orchestration |
35.4% latency cut in building automation (FCC, 2024) |
|
Blockchain |
Finance |
JPMorgan |
Smart access & fraud control systems |
43.7% fall in fraudulent entry attempts (JPM Q1 2024) |
|
Smart Sensors & IoT |
Healthcare |
GE Healthcare + NHS (UK) |
Patient motion & hygiene monitoring |
92.3% infection control compliance (UK NHS Digital, 2024) |
Sustainability Trends in the Smart Homes Buildings Market
The green innovations and strict environmental regulatory mandates are set to boost the adoption of smart home building systems. The sustainable initiatives, such as energy efficiency and circular economy, are augmenting the demand for automated home technologies. The Paris Agreement and the EU Green Deal is emerging as one of the key market drivers. The table below reveals the current sustainability strategies and their business impacts.
|
Company |
Sustainability Initiatives |
Goals & Vision (2030) |
Impact on Business |
|
Schneider Electric |
Decreased CO₂ by 27.4% in 2023 via smart energy tech & renewables |
Net-zero by 2030; 100% green energy across facilities |
€2.7B increase in sustainable revenue |
|
Panasonic |
94.3% renewable energy use at 15 global sites by 2023 |
Carbon neutrality across operations by 2030 |
Improved ESG ranking; increased smart energy product demand |
|
Siemens |
Adopted circular economy in BMS unit; decreased waste by 32.4% in 2023 |
Circular design for all products by 2030 |
Cost reduction in material sourcing; enhanced investor appeal |
Challenges:
- Infrastructure readiness and connectivity gaps: The lack of infrastructure, such as reliable power, 5G, and fiber-optic networks in some developing regions is poised to hamper the sales of smart home products. According to the International Telecommunication Union (ITU), only 27.5% of buildings in sub-Saharan Africa had access to consistent high-speed internet in 2023. This emerges as a critical bottleneck for real-time monitoring and automation deployment. The limited government connectivity programs are anticipated to hamper the sales of smart home building technologies in the years ahead.
- High upfront costs: The high upfront costs for building management systems (BMS), AI-based HVAC, and integrated control systems are expected to limit their sales growth. The low fiscal incentives and grants are also poised to inhibit public and private investments in price-sensitive markets. Furthermore, as per the analysis by the International Energy Agency (IEA) in 2023, nearly 3.3% of global green building subsidies were allocated to ICT infrastructure integration. Such moves challenge the return on investments and minimize financial support vital for expansion.
Smart Homes Buildings Market Size and Forecast:
| Report Attribute | Details |
|---|---|
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
11.7% |
|
Base Year Market Size (2024) |
USD 121.7 billion |
|
Forecast Year Market Size (2037) |
USD 409.2 billion |
|
Regional Scope |
|
Smart Homes Buildings Market Segmentation:
Component Segment Analysis
The hardware segment is projected to account for 40.1% of the global smart home buildings market share by 2037. The increasing adoption of connected devices in smart homes is likely to accelerate the trade of hardware components. The government-led initiatives supporting smart infrastructure deployment are also contributing to the segment growth. As per the analysis by the U.S. Department of Energy (DOE), buildings equipped with advanced sensors and controls reduce energy consumption by up to 30.3%. Such recommendations are expected to propel the sales of hardware components in the coming years. Additionally, the DOE's BTO Sensors and Controls Program aims to boost the commercialization of next-generation building technologies, which is again contributing to the increasing hardware demand.
Application Segment Analysis
The HVAC control segment is estimated to capture 32.5% of the global market share throughout the study period. HVAC control’s direct influence on energy savings and indoor air quality management is increasing its dominance. Smart HVAC systems are most sought-after owing to their AI and IoT features that enable automated climate control and predictive maintenance. The study by the International Energy Agency (IEA) reveals that buildings using intelligent HVAC solutions save up to 40.5% energy, particularly in commercial and residential high-rise sectors. Such suggestions are anticipated to propel the sales of smart HVAC control systems in the years ahead. Additionally, climate-conscious regulations in the EU and APAC, including mandatory energy audits and emissions caps, are set to fuel the adoption of HVAC automation systems.
Our in-depth analysis of the smart home buildings market includes the following segments:
|
Segment |
Subsegment |
|
Component |
|
|
Application |
|
|
Connectivity |
|
Vishnu Nair
Head - Global Business DevelopmentCustomize this report to your requirements — connect with our consultant for personalized insights and options.
Smart Homes Buildings Market - Regional Analysis
North America Market Insights
The North America smart homes buildings market is anticipated to hold 33.9% of the global revenue share through 2037. The robust rise in ICT infrastructure and high smart device penetration are set to propel the adoption of advanced technologies in buildings and homes. Supportive government policies and schemes are also contributing to the increasing trade of smart home building solutions. The funding for broadband expansion and 5G deployment is set to accelerate the sales of smart home solutions. In 2023, the Federal Communications Commission (FCC) revealed that 5G coverage expanded to 67.4% of urban zones. This enables the integration of advanced automation and IoT-enabled systems in homes.
The U.S. is estimated to lead the sales of smart home building solutions during the study period, as rising investments in 5G, IoT, and smart energy systems are opening lucrative opportunities for key market players. As per the study by the National Telecommunications and Information Administration (NTIA), more than 90.5% of U.S. households had broadband access in late 2023. The easy accessibility to advanced connectivity networks is poised to fuel the popularity of smart home building solutions in the country. Moreover, the government's spending on ICT infrastructure reached USD 118.8 billion in 2023, contributing to the expansion of the smart grid and home connectivity infrastructure.
The digital transformation and smart grid modernization are set to boost the sales of technologies in Canada. The rising popularity of smart homes and buildings is fueling the adoption of automated technologies. According to the analysis by the Canadian Radio-television and Telecommunications Commission (CRTC), more than 83.5% of households had high-speed broadband access in 2023. The accessibility to robust connectivity networks is propelling the application of smart home technologies in the country. Furthermore, the Innovation, Science and Economic Development (ISED) states that in 2023, the ICT spending surpassed CAD 11.5 billion, and the majority of it was allocated to smart infrastructure deployment. Overall, Canada is a win-win market for leading smart home and building producers.
Europe Market Insights
The Europe smart homes buildings market is projected to account for 26.5% of the global revenue share throughout the study period. The increasing investments in aging infrastructure upgrades are expected to increase the trade of smart home technologies. The sustainability trend is attracting numerous companies to invest in European countries. In 2023, €1.99 billion was allocated across European Digital Innovation Hubs (EDIHs) to boost smart infrastructure and digital tech adoption. Energy-efficient retrofits, smart HVACs, and AI-integrated building automation are also some of the leading factors augmenting the overall market growth.
|
Country |
2023 ICT Budget Allocation to Smart Homes Buildings (%) |
2024 Market Size (EUR Billion) |
2021-2024 Demand Growth (%) |
|
UK |
11.7% |
€4.1 |
+13.5% |
|
Germany |
12.5% |
€4.9 |
+14.8% |
|
France |
9.9% |
€3.2 |
+12.8% |
The Germany smart homes buildings market is estimated to reach €12.1 billion by the end of 2037. The swift industrial digitalization and urban energy efficiency mandates are expected to accelerate the adoption of smart home building solutions. The Federal Ministry for Digital and Transport (BMDV) allocated more than €3.8 billion in smart infrastructure funding between 2022 and 2026. Also, the Digital Germany 2025 strategy is set to fuel high sales of automated home solutions in the years ahead. Leading manufacturers are investing in domestic R&D and partnerships to scale smart solutions. This, combined with EU-level digital twin pilots for residential energy modeling, is expected to solidify Germany’s position in the Europe market.
The Netherlands smart home buildings market is set to increase at the fastest CAGR of 11.9% during the forecast period. The widespread broadband access and strong regulatory support for green technologies are opening lucrative doors for leading companies. As per the study by the Dutch Authority for Digital Infrastructure (RDI), more than 89.5% of households had smart connectivity in 2023. The broadband expansion re supporting the sales of smart home technologies. Also, the Netherlands Enterprise Agency (RVO) increased subsidies for smart retrofitting in existing buildings by €650.5 million between 2024 to 2o28. The favorable policies and funding schemes are expected to accelerate the production and commercialization of smart home solutions in the coming years.
APAC Market Insights
The Asia Pacific smart homes buildings market is foreseen to expand at a CAGR of 12.1% from 2025 to 2037. The prime factors boosting the demand for automated home technologies are rapid urbanization and a rise in smart city programs. The digital shift across both commercial and residential sectors is poised to propel the sales of smart home solutions in the coming years. Government-led ICT investments are emerging as a key catalyst for the sales of smart home systems. China, Japan, India, and South Korea are the most lucrative marketplaces for smart home building technology manufacturers.
|
Country |
Govt. Spending (Latest) |
% ICT Budget Allocated |
Companies/Units Adopted |
Notable Growth Period |
|
Japan |
$5.4B (2024) |
8.5% |
216 pilot projects |
+22.9% spending (2022-2024) |
|
South Korea |
$2.3B (2023) |
6.8% (MSIT) |
1.3M homes installed |
+29.5% YoY adoption (2022-2023) |
|
Malaysia |
~$840.4M (2023) |
5.9% (MDEC) |
Adoption doubled (2013-2023) |
+74.4% funding growth (2013-2023) |
|
Singapore |
$620M (2023) |
9.9% (IMDA) |
92.3% of new homes |
Smart regulation expansion |
|
Australia |
$1.8B (2023) |
~6.5% (DTA) |
181K smart units |
+18.5% CAGR (2020-2023) |
China is expected to dominate the sales of smart home building technologies in the coming years. The large-scale urban digitization and policy support are pushing the adoption of smart home building solutions. The Ministry of Industry and Information Technology (MIIT) reveals that it invested more than USD 11.5 billion between 2021 and 2024 for digital infrastructure in smart cities and residential housing. The rising government spending on smart buildings is projected to increase revenues of key market players in the years ahead.
The India smart homes buildings market is expected to increase at a CAGR of 13.3% through 2037. The robust urban growth and government-backed smart city missions are boosting the sales of smart home solutions. The Ministry of Electronics and Information Technology (MeitY) states that the smart home tech investments increased from USD 240.4 million in 2015 to USD 1.5 billion annually by 2023. Favorable government support is anticipated to drive the demand for smart home solutions during the study period.
Key Smart Homes Buildings Market Players:
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The smart homes buildings market is characterized by the presence of top companies and the increasing emergence of start-ups. Key players are focusing on technological innovations to attract a wider customer base. The digitalization trend is set to fuel a high demand for automated systems. Industry giants are concentrated on integrating AI and ML technologies to earn lucrative gains from this opportunity. Furthermore, leading companies are collaborating with other players to enhance their product offerings. They are also targeting untapped markets to increase their presence and revenues. The organic sales are poised to double the revenues of key market players in the years ahead.
Here is a list of key players operating in the global market:
|
Company Name |
Country of Origin |
Revenue Share 2024 |
|
Honeywell International Inc. |
USA |
9.6% |
|
Schneider Electric SE |
France |
8.9% |
|
Siemens AG |
Germany |
8.5% |
|
Johnson Controls International plc |
Ireland/USA |
7.7% |
|
ABB Ltd |
Switzerland |
6.9% |
|
LG Electronics Inc. |
South Korea |
xx% |
|
Samsung Electronics Co., Ltd. |
South Korea |
xx% |
|
Legrand SA |
France |
xx% |
|
Bosch Smart Home (Robert Bosch GmbH) |
Germany |
xx% |
|
Lutron Electronics Co., Inc. |
USA |
xx% |
|
Crestron Electronics, Inc. |
USA |
xx% |
|
Delta Electronics, Inc. |
Taiwan |
xx% |
|
Resideo Technologies, Inc. |
USA |
xx% |
|
Clipsal by Schneider Electric |
Australia |
xx% |
Below are the areas covered for each company in the smart homes buildings market:
Recent Developments
- In March 2024, Schneider Electric announced the launch of its EcoStruxure Building Operation to enhance its smart building platform with AI-powered automation. This launch led to a 5.9% rise in global software and services revenue in Q1 2024.
- In January 2024, Johnson Controls deployed its OpenBlue Enterprise Manager 3.0. Since the introduction, more than 1,100 new commercial buildings in the U.S. and Europe have adopted the system, which aids in reducing energy consumption by 17.5% on average.
Author Credits: Abhishek Verma
- Report ID: 7819
- Published Date: Jun 26, 2025
- Report Format: PDF, PPT
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Smart Homes Buildings Market Report Scope
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