IRR-Austin Mid-Year Viewpoint 2015 Local Market Report - Multifamily
The Austin multifamily market continues to expand, driven by strong population growth, the attraction of new business, and low unemployment. Overall vacancy inched up slightly to 5.6 percent the first quarter of 2015, which was anticipated given that more than 13,000 new units are expected to be completed by year end. Absorption remained positive for all classes, in both the suburban and urban setting, with this trend expected to continue for the next several years.
Rental rates for both A and B/C property classes continue to increase. Demand in central and west Austin remains particularly strong with those units seeing the highest rental rate increases. Cap and discount rates for Class A properties fell slightly from the end of 2014 and may continue to do so as 2015 progresses. Downtown Austin continues to be a hot spot for new development, with more than 2,000 new multifamily units under construction. Several large projects nearing completion include The Millennium on Rainey Street and Seven.
A notable project under construction in east Austin is the Green Water Development – Northshore which will include 440 apartment units, retail and office space. The Domain, a mixed-use project in northwest Austin, continues to add multifamily space with more than 500 units planned and under construction. The multifamily market in suburban Austin remains equally strong with unprecedented growth occurring in the communities of Round Rock, Pflugerville, Buda and the Steiner Ranch area. Given continued population growth to drive the demand for the increased number of new multifamily units becoming available, the market should continue to remain balanced and strong through the remainder of 2015.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.