Canberra's tenants might embrace nation-leading falls in asking rents but one expert says new quarterly figures reflect a deeper lack of confidence in the capital's market.
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Data being released on Thursday shows median asking rents for houses in Canberra had dropped 3.6 per cent in the September quarter - or $17 a week - with unit rents down 1.7 per cent, the largest drop for both sectors of any capital city.
The quarterly shifts mean rents for the city's properties have dropped more heavily than any other capital city in the 12 months to September 30, and Australian Property Monitors' Andrew Wilson said the weakness reflects wider market concerns.
"I think we're just starting to see the signs of declines in house prices and rents as well," Dr Wilson said. "I do think there are perhaps underlying economic issues that are driving reduced demand for renting and for buying."
Dr Wilson said the Canberra property market had been the most volatile of any capital city in the past year, and while there was still heavy interest from first home buyers, the fears and reality of widespread public sector job cuts were hitting the local economy.
"Of all the markets, it was the Canberra housing market that seemed to be affected not just by the election campaign but by the issues involved in the election," he said.
"I guess it was a race to the bottom in terms of job cuts, and this has to have an effect - on sentiment and the actual job shedding."
The senior economist said APM would release new data on house prices this month but early tracking was indicating a trend of flatlining or declining prices in the city.
The latest figures found Canberra remained the fourth most expensive capital city in which to rent, after Darwin, Sydney and Perth, with median asking house rents of $463 a week and unit rents of $407 a week.
While the national eight-city average was a 1 per cent rise in house rents across the quarter, only Melbourne (2.8 per cent) and Brisbane (1.3 per cent) saw actual growth.
The Coalition government has vowed to cut 12,000 public service jobs nationally through natural attrition, while the deposed Labor government had raised fears among unions that up to 5000 public servants could have been cut if a third term had been won.
Dr Wilson said Thursday's new unemployment figures could also tell a story about the strength of the national economy. "If the national economy was firing on all eight cylinders, would there be a need for job cuts?"