AUSTIN, TX—Average Austin apartment rents increased in July for the seventh straight month, though the rate of increase from last year fell to a six-year low, according to Axiometrics, provider of apartment and student housing market intelligence. Employers added 38,400 jobs in the 12 months ending in June, a slightly slower pace than at the beginning of 2016. Some 10,173 new units are expected to come to market this year–the busiest of the current apartment cycle–and another 5,906 identified for 2017 completion.
Jay Denton, senior vice president of analytics for Axiometrics, tells GlobeSt.com: “Austin has had some of the best population growth in the country the past five years, but supply is starting to take its toll, particularly in the areas near downtown. Permitting has been steady, but at a very elevated level since 2012. The market has been averaging close to 21,000 new residential units permitted per year and about half of them have been multifamily. About half of the market's properties under construction or in their initial lease-up are located within 2.5 miles of 6th Street and Congress, which is leading to negative rent growth in some of the neighborhoods.”
Austin's average rent in July was $1,203, slightly less than the national rate of $1,291, with an annual effective rent growth of 2.6%, the lowest since July 2010. The national annual effective rent growth is 3.1%. Occupancy is identical to the national rate of 95.1%.
Of the 17 Austin submarkets with more than 1,000 units, the following areas comprise the top five for annual effective rent growth last month. The Far North Central with rent growth of 6.7%, Near Northwest with rent growth of 5%, Near North Central with rent growth of 4.8%, North Travis with rent growth of 4.8%, and San Marcos with rent growth of 4.8%.
“Austin has been adding a lot of jobs, but also adding a lot of apartments,” said Stephanie McCleskey, VP of research for Axiometrics. “Though a lot of the new supply is being absorbed, the slowdown in construction we're starting to see for 2017 would come as welcome relief.”
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
AUSTIN, TX—Average Austin apartment rents increased in July for the seventh straight month, though the rate of increase from last year fell to a six-year low, according to Axiometrics, provider of apartment and student housing market intelligence. Employers added 38,400 jobs in the 12 months ending in June, a slightly slower pace than at the beginning of 2016. Some 10,173 new units are expected to come to market this year–the busiest of the current apartment cycle–and another 5,906 identified for 2017 completion.
Jay Denton, senior vice president of analytics for Axiometrics, tells GlobeSt.com: “Austin has had some of the best population growth in the country the past five years, but supply is starting to take its toll, particularly in the areas near downtown. Permitting has been steady, but at a very elevated level since 2012. The market has been averaging close to 21,000 new residential units permitted per year and about half of them have been multifamily. About half of the market's properties under construction or in their initial lease-up are located within 2.5 miles of 6th Street and Congress, which is leading to negative rent growth in some of the neighborhoods.”
Austin's average rent in July was $1,203, slightly less than the national rate of $1,291, with an annual effective rent growth of 2.6%, the lowest since July 2010. The national annual effective rent growth is 3.1%. Occupancy is identical to the national rate of 95.1%.
Of the 17 Austin submarkets with more than 1,000 units, the following areas comprise the top five for annual effective rent growth last month. The Far North Central with rent growth of 6.7%, Near Northwest with rent growth of 5%, Near North Central with rent growth of 4.8%, North Travis with rent growth of 4.8%, and San Marcos with rent growth of 4.8%.
“Austin has been adding a lot of jobs, but also adding a lot of apartments,” said Stephanie McCleskey, VP of research for Axiometrics. “Though a lot of the new supply is being absorbed, the slowdown in construction we're starting to see for 2017 would come as welcome relief.”
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
