The market for custom-designed and installed home automation systems has seen a fundamental shift, from the majority of systems being installed in new build homes to systems now being installed predominantly as retrofits and renovations. New builds now represent around 40 percent of all mid- to high-end home automation installations – down from approximately 90 percent before the recession, according to ABI Research’s new report “Luxury Home Automation Systems.”

Historically, retrofits and renovations were relatively uncommon, due in part to the unreliability of wireless protocols at the time, but more so because of the disruption and cost involved in fitting wiring in the architecture of an already existing home. But, the sudden and dramatic collapse of residential construction in several key markets coincided with the timely emergence of more reliable, no-new-wires technologies, such as ZigBee and Z-Wave.

“The development of mostly standards-based technologies and resultant increase in retrofit jobs has somewhat offset the decline in new build business,” said Craig Foster, ABI senior analyst/Home Automation Systems, in a statement.

That said, many vendors still eagerly await an upturn in the housing market and according to the latest set of statistics from the National Association of Home Builders (NAHB), this upturn could be just around the corner. The NAHB’s seasonally-adjusted forecast predicts construction of 658,000 new homes during 2011 – 12 percent more than in 2010 and the highest year-on-year rise (if realized) since 2005.

The entrance into the market of service providers like home security companies will also benefit vendors operating in the custom-install space. A lack of awareness among the general populace has always been an inhibitor to greater adoption of home automation systems, and service providers, with vast marketing budgets, are bringing about much greater exposure of this technology. According to a second, related report, total global subscribers of home automation services provided for by home security companies will increase from around 513,000 in 2010, to over 10 million by 2016.

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