It's been a long time coming for Austin landlords — who have for years dealt with declining rents as an influx of supply flooded the market. However, that's starting to come to an end, as the first quarter of 2026 showed signs of a shift with a bullish outlook, as noted in a new market report from Colliers.
However, the bumpy environment did continue for the most part in the first quarter, with occupancy at 92.8 percent, down 40 basis points year-over-year. Also, positive absorption was 3,465, about half the 6,318 units posted in the first quarter of 2025, but a rebound from the negative territory seen during the fourth quarter of 2025.
Average monthly rents were down $65 year-over-year to $1,400, but up modestly from the $1,397 from the fourth quarter. The absorption and the rent trends suggest that while both categories are lower than a year ago, the bottom could have been hit due to the quarterly improvement.
"Following ten consecutive quarters of rent declines, average rents have recovered to $1,400," Colliers said. In contrast to the past ten quarters, asking rents, especially among Class A properties, have begun to rise."
To back that up, the trends and projections seem favorable.
For one, supply has shrunk to 2,409 units, down 3.9 percent from the first quarter of 2025. Also, construction has fallen to 16,171, compared with 23,590 units.
At the end of Q1 2027, Colliers predicts that occupancy will surge by 230 basis points to 95.1 percent, with rents improving to $1,417 and demand skyrocketing to 17,710 units. That's expected to come as construction crashed to 6,409 units, while supply increases to 10,134 units in a year from now.
"Looking ahead, the market is expected to move toward equilibrium as new construction slows and occupancy continues to rise, supported by an influx of younger renters and healthy competition in the Austin area," Colliers predicted.
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