Why the next wave of innovation is likely to make homes even more expensive

Imagine your home generating an income without you having to do anything at all. It isn’t happening at scale yet, but the potential is increasing as new systems emerge that can save or even earn households money. If these technologies become widespread, they will add a financial return to home ownership. And when a home delivers a financial return, it becomes more desirable to own, a shift that inevitably places upward pressure on values.

The most advanced developments are in household energy. Rooftop solar is now on more than a third of Australian homes and continues to lower bills. Battery uptake is growing, with more than 180,000 installed nationwide and some estimates placing the figure above 270,000. The Cheaper Home Batteries Program, introduced in July 2025, is accelerating this trend. Batteries allow households to store energy when it is cheapest and use it later, and electric vehicles will increasingly provide an additional storage source. Smart appliances and demand-response programs add further value by shifting usage to times when the grid has excess supply.

A major new policy will accelerate this shift. From July 2026, households in New South Wales, South Australia and South-East Queensland will have access to three hours of free electricity each day under the federal “solar sharer” tariff. Some retailers already offer similar plans, but the new mandate will make free electricity widely available across Default Market Offer regions. The aim is to use the growing volume of excess solar generated in the middle of the day, when wholesale prices are frequently negative. For homes with a battery, the benefit is substantial: free electricity can be stored and used later, significantly reducing annual costs. The same applies to electric vehicles if they are parked at home during the day.

Virtual power plant (VPP) schemes are also expanding. These programs link thousands of home batteries so they can stabilise the grid during periods of high demand. South Australia is the most advanced, but programs now operate in New South Wales, Queensland and Victoria through retailers and network operators. Households receive bill credits or payments for participating, and as battery uptake grows this type of participation may become standard in new homes.

Outside energy, other possibilities are emerging. Some companies are trialling systems that allow homes to contribute unused computing capacity to distributed networks. Early trials are small, but they mirror the early stages of cloud computing. Smart-home sensors are producing detailed environmental and usage data that may eventually have commercial value to insurers, councils or infrastructure planners. These developments are early, but they point to more ways in which homes may integrate with wider systems.

Homes that cut running costs are already attractive to buyers. But a home that can generate revenue is a different proposition altogether. When a property produces an income stream, markets value it more highly because it offers a financial return as well as a place to live. Buyers respond to that combination. An asset that can reduce bills, earn money and operate automatically in the background becomes a more compelling investment. As more homes adopt batteries, EV chargers, smart appliances or grid-interactive systems, this income-generating potential is likely to become part of how properties are assessed and compared.

For prices, the mechanism is straightforward. When a home delivers an income stream, the market capitalises that return into the sale price in much the same way it does for rental income or commercial yields. A property that can earn or save money is simply worth more to prospective buyers, which means they are willing, and able, to bid higher for it. Investors are also more likely to enter the market when a home offers a predictable financial return. As more buyers compete for these homes, prices rise. This improves the position of existing owners but makes it harder for people who are not yet in the market.

Government policy will influence how large these benefits become. The early years of rooftop solar saw very high feed-in tariffs that had to be reduced as installations increased. Similar adjustments are possible as VPPs, smart systems and EV-to-home technologies expand. Export limits, tariff changes and participation rules may soften the returns available to households.

Even so, the direction is clear. Homes will not become major income generators, but they will deliver financial value in ways they previously did not. These benefits will make many homes more desirable and, in turn, help push values higher. The next phase of home ownership is not just about lower bills, it is about the home becoming an active participant in the energy and digital economy. And that shift will have an impact on property prices.