And the federal government's annual State of Australian Cities report had bad news on the cost of living.

The capital's residents pay more for rent, some utilities, household goods and services than those in any other Australian city.

It says Canberra is behind only Darwin for rates of ''active travel'' among workers, with 2.7 per cent of Canberra's commuters riding bicycles to work and 4.7 per cent walking.

Public transport passenger rates continue to lag behind other cities. Just 7.6 per cent take the bus to work each day. Only Darwin and Hobart show lower patronage rates for mass transit.

The report, published on Tuesday, takes a snapshot of a Canberra-Queanbeyan metropolitan area with a population of 418,292 in 2011, Australia's eighth largest city.

It paints a picture of a city leading the way in areas like workforce participation and public perceptions of safety and public order, but with problems around its cost of living and housing affordability.

Despite recent high-profile issues in the ACT's health system, a high 71 per cent of the residents believed the city has ''good educational facilities and healthcare services''.

The report also states that ''compared to other capital cities, Canberra also has a high proportion of residents who agree that the city has 'good transport infrastructure and services', 53 per cent.''

But only 42 per cent said they believed the city provided ''quality affordable housing''.

The report has been published annually since 2010 by the Department of Infrastructure and Transport. The latest edition was launched by federal minister Anthony Albanese.

The report's authors wrote that the cost of living in the nation's major cities had been stable for the past 20 years, but that Canberra was the nation's second most expensive capital.

''While Australian cities may be expensive for international visitors, the cost of living for Australian residents of Australia's capital cities has been relatively stable for over two decades,'' the report says.

''Sydney is the most expensive city with the highest average costs for electricity, mortgage interest, transport and recreational activities.

''Canberra, the second most expensive city, has the highest costs for rent, utilities, other than electricity, and household contents and services.''

The report also finds Canberra increasingly hot and dry, but more attractive to visitors.

The report shows Canberra and other inland cities experienced a trend of larger increases in average annual temperatures and decreases in average annual rainfall than the other major cities.

Since 1952, the city's average maximum temperature has increased by 1.7 degrees.

In the year to March 2012, according to the report, Canberra hosted 4.1 million international visitor nights, up significantly from 2.7 million in 2008.

Chief Minister Katy Gallagher was focusing on the positive aspects of the report on Tuesday.

''It is pleasing to see Canberra continues to lead in a number of key areas, such as workplace participation, with labour force participation at 72.4 per cent, well above the national average of 65.1 per cent,'' she said.

''We also remain the volunteering capital of Australia, with 21.2 per cent of the population aged 15 and over volunteering on a regular basis.''