Demand in Indianapolis' multifamily sector has reached a "decade high,"
according to a full-year and fourth-quarter 2024 report from Colliers. "This surge in demand aligns with Indiana’s growth, as the state jumped 19 spots to rank 8th in U-Haul’s growth index," Colliers wrote.
"More people are moving in, with U-Haul arrivals increasing by over 1% and departures declining by 2%."
In the fourth quarter, the vacancy rate dropped by 30 basis points from the previous three months to 2.60 percent.
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However, there were a couple of sluggish categories in Indianapolis' multifamily market. Transactions plunged by nearly 29 percent to 876.3 million year-over-year in 2024. Also, rent growth slowed to 2.60 percent fourth quarter compared with 2.90 percent in the previous three months. That came despite average rents per unit increasing by 2.6 percent to $1,299.
Inventory shot up by 3.7 percent to 168,676 units.
"While new supply has expanded rapidly, particularly in the Class A segment, the influx of high-end apartments has created short-term competitive pressures, leading to higher vacancies and increased concessions—especially in the north suburbs," Colliers said.
But the CRE firm forecasts that the construction pipeline will slow down in both 2026 and 2027. That will lead to the "quick adoption" of new units and a return to rent growth.
"Despite near-term supply challenges, Indianapolis remains a thriving destination for renters, with strong fundamentals pointing to continued long-term growth," a bullish Colliers said.
Some top projects under construction in Indianapolis currently include 400-unit Sylo at the Farm, 367-unit Monon Square, and 358-unit Towns and Flats at Hyde Park.
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