News from the west suggests that Western Australia is well on the way to another mining boom. Real Estate Institute of Western Australia figures published in the second half of 2010 listed the median house price in the remote mining town of Karratha as $775,000 – or 49% more than Sydney. In Port Hedland the median price topped $900,000. 

Both towns are located in the Pilbara mining region, a remote area that produces one of the world’s largest supplies of iron ore and natural gas. Karratha is located some 1,500km north of Perth, or close to 16 hours drive, and with so many flocking to work the mines, house prices are fuelled by consequent low stock and the cost of construction resulting from the ferrying of materials.

There’s no denying a boom in these remote areas, but has this translated to the rest of the State, and more importantly, has it consequently fuelled home automation opportunities?

Mark Jeisman is co-director of Surround Sounds, a long established systems integrator providing home entertainment and smart home solutions to the premium building market in WA through both retail and custom installations. As a high-end integrator the ‘mining’ flow-on effects for this company have come predominantly from the top end of the market.

“It is the white collar mining company executives or CEOs of companies in or on the periphery of resources that fully embrace many of the things that our company can provide,” Mark explains.

“The calibre of home built for this client is such that they demand a range of electronic integrated solutions covering security, CCTV, energy management, home automation, lighting control, communications and home entertainment systems. Often built in blue ribbon suburbs, these homes are multi-million dollar projects that require a significant amount of design, documentation, project management and personalised servicing. Our team has built a reputation doing a select amount of these projects a year to deliver this level of ‘turn key solution’ for these busy clients. We also manage in an ongoing capacity the home’s electronic systems in person and remotely.”

Yet, while Surround Sounds’ has benefitted from the wider mining market, there is less demand for home automation services from the blue collar sector, building in regional locations, Mark explains.

“There is no question that the influx of skilled workers and industry professionals into WA contributes significantly to the local economy. The level of disposable income of those personnel directly or indirectly employed by the resources sectors is welcomed by local companies like ours when it comes to technology solutions. While we haven’t seen an increase in these local regional areas with home automation, there is indeed a big take up in quality home entertainment systems. After all, many of these regions are in areas where outside temperatures can exceed 50ºC; so with the air conditioner on max, many shift workers enjoy their home theatre and hi-fi systems to pass the time. We often ship systems up north to these towns and regional centres.”

Possible future industry opportunities rest with current crop of ‘fly in, fly out’ (FIFO) mining workers, Mark says.

“One of the issues facing mining companies is that many of the small regional towns cannot fully support all of the mine workers. The expansion of mines is so fast that local infrastructure, land release and building lead times mean that we have a mix of locally housed workers and FIFO workers based away from the mine site.

“FIFO workers may be based in Perth, for example, and commute to a remote mine for a period of time. Many only do this for short periods until they have enough money saved, find some local employment in Perth and then perhaps build in the metro area with all the nice ‘to haves’ including a connected home and great home entertainment.”

So while there are opportunities resulting from the mining boom, many are specialised, explains Mark, with the true ‘boom’ yet to be realised. 

“In the past many clients would simply adopt the ‘gotta have it, let’s do it’ attitude, where any specification was merely glanced and actioned. Of course, the Global Financial Crisis hit and while WA was well placed to ride it out better than many, those ‘devil-may-care’ days are perhaps a thing of the past.

“The correction in the market has meant that now people are scrutinising more than ever many elements of system design. In an increasingly educated market, many customers are juggling individual system components to adjust costs. WA is still on the road to recovery like many areas, but I would not say we are in a resources boom again just yet. Perhaps later in 2011 things may kick in stronger than currently, but we are on the right track.”

A broadband focus

Despite its very different business model – a ground-level focus on the integrating smart wiring into all new-build homes – integration company Intelligent Home agrees that the industry isn’t experiencing a true ‘boom’ yet.

“We haven’t noticed any real flow on effect from the so-called mining boom,” says director Brenton Morris. “If anything, the industry is still in a downturn.”

“Some builders are, of course, still doing very well, but most are reporting a 30 to 50% downturn from the this time last year. From builders we’re hearing ‘we’re doing ok’ or ‘our numbers have dropped’, we’re certainly not hearing ‘we’re killing it’.”

This is backed up by HIA economic figures for the State, which predict economic downturn for the building industry in the second half of this year, which has obvious flow-on implications for the home automation market.

Brenton says that while the trades will always be attracted to the high salaries offered by the resources industry, the skills shortage is also not at the dire levels it was during the 2006 resources boom.

“During the big mining boom, you’d hear adverts all day on radio and finding tradespeople was close to impossible as most had gone off the work the mines, attracting by the high remuneration rates. I don’t hear any adverts now.

“In those days, when we’d put an advert in the paper for an electrician, we’d get no responses. In contrast, trades are pretty easy to find at the moment.”

As a result of its unique business model, Intelligent Home is looking towards another ‘booming’ project, the National Broadband Network (NBN), an ambitious Federal Government plan to deliver high-speed broadband to Australians via a wholesale-only, open access high-speed network.

“We are not a typical integrator,” Brenton explains. “We have a fairly unique business model in that we work with developers. Any customer that buys a block of land is referred to us by the developer so they can see how Fibre-to-the-Home works. We provide a free consultation and design. Once the client understands the benefits, they are able to make an educated decision about pre-wiring their home. Many clients will then take our design to their builder, meaning we’ve also developed relationships with many big building companies.

“We have had 30% growth in the last year due to our larger market share in WA and our relationship with developers, Telstra, Opticomm, and NBN awareness.”

On completion, the NBN should provide broadband speeds of up to 100Mbps, up to 100 times faster than those most Australians have ready access to today. Flagged as a nation building project, the key flow-on effects of the project are stimulation of the economy, through the generation of 25,000 jobs per year over its 9.5 year build phase, and, post-completion, through establishing Australia as a member of a ‘global city’.

At ground level it involves the laying of fibre optic cable to 93% of Australian homes, schools and businesses, with remaining areas to be connected via a combination of next-generation high speed wireless and satellite technologies delivering peak speeds of at least 12Mbps, and more often more.

For the home automation market – this has flow-on opportunities in terms of how homes are wired, he says.

“The NBN has given industry legs and fuel for growth. It’s such a focal point at the moment.

“The bottom line with the NBN is it is cabled differently to how we know it. In WA at least there’s a big concerted effort to make sure those buying blocks of land are getting all the correct information about the NBN and its cabling standards. It’s about educating clients and putting the onus back on the builder. Some less proactive builders in this area are allowing houses to be wired for non-NBN compliance – and that’s an issue across the country.”

Its work with developers leaves Intelligent Home in perfect position to benefit from the flow-on effects of NBN rollout and future up-sell opportunities. 

Rollout of the NBN has begun, with most of the Australia-wide fibre optic cable for Backbone Blackspots Program already complete. This includes the March completion of the Perth to Geraldton 449km fibre backbone link.

Work is now underway in rolling out the fibre network Australia wide. Three WA sites – Victoria Park, Geraldton and Mandurah – will be among the first to experience the new super-fast speeds.