Europe Smart Home Market to Reach $67.5 Billion by 2031

The Europe smart home market is projected to reach $67.5 billion by 2031, at a CAGR of 13.9% from 2024 to 2031.

The growth of the Europe smart home market is driven by the rising need for home safety & security, increasing government initiatives promoting the adoption of smart technologies, and the wider proliferation of Internet of Things (IoT) technologies. However, High procurement costs restrain the growth of this market to some extent.

Furthermore, consumers' need for complete flexibility & customization is expected to generate growth opportunities for market stakeholders. However, data privacy & security concerns and smart home solutions' compatibility with existing infrastructure are major challenges in the Europe smart home market.

Governments in Europe are actively promoting the adoption of smart home technologies to address challenges such as energy efficiency and sustainability and improve the quality of life for citizens. These initiatives are driven by a combination of environmental goals, economic strategies, and technological innovation. Regional governments are encouraging the use of smart home technologies that optimize energy use, such as smart thermostats, automated lighting, and energy-efficient appliances. Countries such as Germany have introduced financial incentives, such as grants and tax rebates, to support the adoption of energy-efficient technologies in homes. The French government also offers tax credits under the Energy Transition Tax Credit (CITE) program, which includes rebates for smart home technologies like energy management systems.

Furthermore, governments across Europe are integrating smart home technologies into broader national sustainability and digitalization agendas. These efforts not only help reduce energy consumption but also support long-term environmental goals while fostering innovation in the building and technology sectors. By combining financial incentives, policy frameworks, and public awareness campaigns, Europe is positioning itself as a leader in the adoption of smart home technologies.

Based on product type, in 2024, the smart security & monitoring systems segment is expected to account for the largest share of 29.1% of the Europe smart home market. However, the smart speaker's segment is expected to register the highest CAGR of 18.7% during the forecast period 2024–2031.