Austin Multifamily Report – Winter 2019, Part 2

Despite a steady pipeline of new product, rent growth across the metro continued, ending 2018 at 3.6 percent year-over-year, while a healthy demand has put upward pressure on occupancy.
Austin rent evolution, click to enlarge
Austin rent evolution, click to enlarge

As one of the fastest-growing metros in the U.S., Austin showed solid multifamily fundamentals in 2018. Despite a consistent pipeline, rent growth continued to accelerate, ending 2018 at 3.6 percent year-over-year. Occupancy in stabilized properties rose a strong 80 basis points in the 12 months ending in November 2018, mirroring a healthy pace of absorption and showing that Austin has room for further growth.

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Employment growth was diverse and above the 3.0 percent mark all year, reaching 3.5 percent year-over-year through October, well ahead of the 2.1 percent national rate. The metro added 40,400 jobs, with trade, transportation and utilities (12,700 jobs) leading growth. Professional and business services added 7,000 positions and is expected to continue performing well following the announcement of Apple’s new $1 billion, 133-acre campus in North Austin, which is anticipated to employ 15,000 people over the next five years.

Austin sales volume and number of properties sold, click to enlarge
Austin sales volume and number of properties sold, click to enlarge

Roughly 10,500 units were delivered in 2018, with less than a quarter in the Renter-by-Necessity class and 1,234 units in fully affordable communities. The metro had nearly 19,000 units underway as of December—we expect 11,730 units to be delivered in 2019. Considering Austin’s strong fundamentals and steady pace of deliveries, Yardi Matrix anticipates its rents to rise 2.0 percent this year.

Read the full Yardi Matrix report.