Austin Multifamily Report – Summer 2019
Despite the more than 23,000 units underway in the metro as of April, developers are struggling to keep up with soaring demand.
Austin rent evolution, click to enlarge
Austin’s multifamily market is poised for a stable 2019, with rent growth rising 3.7 percent year-over-year through April, outperforming the national rate by 70 basis points. Developers are struggling to keep up with demand, and the labor shortage is not helping: The occupancy rate in stabilized properties rose 50 basis points over 12 months, to 94.4 percent as of March
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Employment growth softened to 2.5 percent as of March, with the addition of 22,700 jobs, but remained way above the 1.6 percent U.S. figure. Moreover, following exceptional performance over the past few years, the job market is bound to moderate further. The tech city’s office-using industries added 10,400 jobs, nearly half of Austin’s gains, led by the professional and business services sector. Trade, transportation and utilities added 4,700 positions and is expected to grow further with the expansion of Austin- Bergstrom International Airport, which is anticipated to wrap up by 2040.
Austin sales volume and number of properties sold, click to enlarge
Some 800 units were delivered in the first four months of 2019, all in the Lifestyle segment. More than 23,000 units were underway as of April, with the bulk targeting the upscale end of the spectrum. Of these, nearly 11,000 are slated for completion by the end of the year. With demand slated to remain strong while development powers through, we expect the average Austin rent to advance 4.1 percent this year.
