Not many cities have been overbuilt quite like multifamily in Austin — but conditions are expected to continue improving at least marginally going forward as supply starts to slow down.
It comes from a second-quarter report from Colliers, which found that occupancy increased to 93.9 percent, from 92.2 percent 12 months ago. Lake Travis and West Austin are seeing the lowest vacancy rates, at 6.3 percent and 7.5 percent, respectively.
"Occupancy continued to rise, building on last quarter’s momentum, and aligning with projections of improving balance between supply and growing demand from the area’s expanding population," the CRE firm noted.
Construction is down by a substantial more than 20,000 units from the second quarter 2024 levels, at just 18,029. Also, deliveries were cut in half to 3,913.
That said, many key fundamentals are still lagging. For example, average asking rents are down more than $100 year-over-year to $1,453. Also, demand is cooling off, with net absorption down to 6,086 units versus 7,160 seen 12 months ago.
"Asking rents declined as property owners adjusted pricing to attract tenants, particularly in Class C units, which saw the sharpest drops," Colliers explained.
However, Colliers projects that just about everything will see at least some improvement in the second quarter of 2026 compared with the second quarter levels in 2025. Notably, it forecasts net absorption to more than double to 13,774 units, with occupancy seeing a full percentage point gain to 94.9 percent. At the same time, construction is expected to fall even more to just 8,051 units, while deliveries are set to spike to 10,915 units. A little bit more modestly, asking rents are expected to increase $17 to $1,470.
"Forecasts suggest the market is moving toward equilibrium, with construction slowing and steady demand from younger renters pushing occupancy upward," said Colliers.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.