My headcanon is austin and ally's relationship starts turning romantic once ally musters her courage to perform. And their duet in the end of the episode confirms this
Although technically I think they start to develop feelings for each other towards the end of the first season. There's this moment where they hug in 1x18 after Austin's parents basically confirm that they don't care about his interests. And that's when Austin realises that Ally and her songs are really all he has, and he decides to go through with surgery. And it's not a casual hug like before. It's very intimate. From that moment on, their hugs feel charged rather than casual. And their first performance together just awakened all of that.
My headcanon is austin and ally's relationship starts turning romantic once ally musters her courage to perform. And their duet in the end of the episode confirms this
Although technically I think they start to develop feelings for each other towards the end of the first season. There's this moment where they hug in 1x18 after Austin's parents basically confirm that they don't care about his interests. And that's when Austin realises that Ally and her songs are really all he has, and he decides to go through with surgery. And it's not a casual hug like before. It's very intimate. From that moment on, their hugs feel charged rather than casual. And their first performance together just awakened all of that.