The ACT is the only jurisdiction to go backwards on a national scorecard for residential building activity.
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Queensland and Tasmania sit below the ACT on the Housing Industry Association's half-yearly league tables, which are based on 14 key indicators.
But those states are little changed when compared with long-term averages, whereas the ACT tumbled from fourth to sixth place on the table and could still be showing after-effects of the boom years of 2010 and 2011 for new home building.
On the other hand, the NSW home building market appears to be gathering momentum after years of under-building, and is attracting buyers from the territory, according to the HIA.
Association economist Geordan Murray says the ACT's scorecard is the worst it has been since 2008, although in such a small jurisdiction trends could be volatile.
"Lower levels of activity in the multi-unit segment drove the decline, although there were also emerging signs of weakness in the ACT's detached-house building market," Mr Murray said.
"On the chart showing where changes have occurred, the value of alterations and additions declined two ranking points, approvals for detached dwellings dropped three points, and another big mover down is turnover of established homes, which dropped three points," he said.
"We look at the number of transactions for established homes and transactions involving multi-units, and the number of hours worked for workforce. The ACT has performed poorly."
One bright spot was the ACT's detached-house segment, for which it was the top-ranked jurisdiction. But a lower ranking for detached-dwelling approvals suggests this position may not be maintained.
Cutbacks in the public service and a decline in real wages for those still employed in the public service had caused the slide.
"The uncertainty within the household sector is clearly evident in the figures related to turnover of established homes, " Mr Murray said.
"A decline in turnover saw the ACT's ranking for established-house transfers slip three places while the ranking for transfers of established multi-unit dwellings slipped one place."
Association ACT and southern NSW executive director Neil Evans said people were going across the border to build new homes.
"You only have to look at Googong and Tralee, it's a real option. We have a situation where we are surrounded by NSW, where the housing market is really starting to bounce back because they have been under-building for nearly a decade and the NSW Government has good incentives for first-home owners and land is much cheaper," he said.
"It is not dire straits [in Canberra] by any means," Mr Evans said. "We are still averaging 3200 [dwellings] a year and our 10-year average is 2800.
"We are still doing OK but we did come off an almighty high from 2011 when we were doing 5000 dwellings."
Mr Evans said that after coming back from that spike, he would like to see the market perform a little better, and the HIA was looking at policies to reinvigorate activity in the ACT.
Mr Evans said after the boom years of 2010 and 2011, he was sure some contractors, sub-contractors and their employees would be moving interstate for opportunities from NSW's momentum.
NSW's ranking on the HIA scorecard sits at third place behind Western Australia and the Northern Territory. It has experienced strong multi-unit activity, which is beginning to lose momentum.
Mr Evans said the ACT's renovations remained reasonable.
"We are looking at doing around $380 million of renovations a year, that is what is recorded by the [Australian] Bureau of Statistics, there would probably be that figure again in small renovations and repairs and maintenance that doesn't need a building approval."
