Image courtesy of Colliers

A new report indicates that Greater Boston’s normally resilient apartment market is facing headwinds from the economic slowdown, with vacancies rising and rent growth deaccelerating.

The vacancy rate rose 0.6 percent from the previous quarter to 4.8 percent in Greater Boston, Colliers reported, and rent growth has started to soften after a sharp recovery from the early stages of COVID-19.

Rents rose 18 percent in the previous six quarters and now approach $3 per square foot. But the report notes that landlords are unlikely to propose big rent increases now that household budgets face pressure from inflation, and owners are wary of relocations to newly-completed competitor properties.

More than 18,000 multifamily units are under construction in Greater Boston, including 4,000 scheduled to deliver by the end of 2022 and another 12,000 on track to open in 2023, according to Colliers research. Nearly 60 percent of the new projects are being built in Boston, Cambridge and inner suburbs.

But rising interest rates and higher labor and material costs could chip away at the development pipeline.

“Given the troubles that many developers are having getting projects over the finish line, there is a high likelihood that both of these numbers will come in below expectation,” Colliers Boston Research Director Jeffrey Myers said in an email.

By submarket, vacancy rates range from a high of 5.1 percent in Boston’s Seaport District to a low of 2.1 percent in Brookline.

Apartment demand continues to be driven by the high cost of for-sale housing, rising mortgage rates, and the region’s relatively low unemployment rate of 3.8 percent. Declining consumer confidence could discourage renters from considering home purchases, remaining in the apartment market longer and propping up demand, the report said.