IRR: Austin multifamily 2015 viewpoint
AUSTIN – Strong population growth, the attraction of new business, and low unemployment continue to drive the expansion of the Austin multifamily market.
Overall vacancy has held steady at just under 5 percent in the past two years but is expected to increase slightly in 2015, as more than 13,000 new units are expected to be completed.
Rental rates for both A and B/C property classes continue to increase, with units in central and west Austin seeing the highest rates, as demand remains strong.
Cap rates are steady across the metro area and will likely decrease only slightly throughout 2015.
Discount rates decreased slightly in 2014 and will likely remain flat over the coming year.
Downtown Austin continues to be a hotspot for new development, with nearly 2,000 new multifamily units under construction.
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 into 2015.
| Urban Multifamily Class A | Urban Multifamily Class B | Suburban Multifamily Class A | Suburban Multifamily Class B | |
| Going In cap rates | 5.5% | 6.3% | 5.8% | 6.3% |
| Discount rates | 7.5% | 8.5% | 8.0% | 8.5% |
| Market rent ($/unit) | $1,556 | $792 | $1,104 | $816 |
| Vacancy rate | 13.4% | 1.7% | 6.1% | 3.5% |
See Integra Multifamily Annual Viewpoint 2015.
Also check out Austin Multifamily Market Research.
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