Cheap rentals can be found in these Canberra suburbs where prices have fallen

Industry figures say some landlords are being forced to shift their expectations to meet the ACT's distinct rental conditions.

Canberra was the only capital city to record a decline in rental values over the 12 months to May, with rents in one suburb dropping by almost $100 per week.

Data by property firm CoreLogic found the median weekly rent for a Canberra house fell 3.2 per cent over the 12 months to May.

In comparison, Sydney and Melbourne house rents increased 9.5 per cent and 10 per cent year-on-year, respectively.

Taking into account a 1.5 per cent increase in Canberra unit rents, overall dwelling rents fell 1.9 per cent year-on-year, bucking a national upward trend.

Despite the decline, Canberra's rents remained the second highest across the capital cities, behind Sydney.

In CoreLogic's mapping the market report, double-digit rent increases were recorded in nearly 1700 house and unit markets across the country over the 12 months to May.

Only a little more than 200 suburbs saw a decline in house rents in the past year, the majority of which were located in Canberra and regional areas. Rental values are calculated using a property's attributes, valuation and recent rental listings and are considered a leading indicator of asking rents.

CoreLogic economist Kaytlin Ezzy said softening rental conditions in the ACT were likely due to more rental homes becoming available.

The vacancy rate in Canberra increased from 0.7 per cent in March 2022 to 2.2 per cent in May 2023.

"More stock means tenants have more choice and potentially more power when negotiating their rent," Ms Ezzy said.

Maria Edwards, chief executive at the Real Estate Institute of the ACT, said the rising cost of living meant tenants were seeking smaller, more affordable homes - like units.

"People are very much compromising on the properties that they want to commit to long term," she said.

"So people that might have rented a three-bedroom house before are now renting a two-bedroom unit."

Ms Edwards said more student accommodation opening up earlier this year may have led to more private rentals becoming available.

"Some of those bigger homes that used to be with groups of people in them, they're the ones that are sitting vacant," she said.

Licensed agent Niki Rizquallah said she could not remember a time in her career when she had dealt with so many tenants vacating properties.

Her company, Edge Niki Rizquallah, currently manages about 80 rental homes across Canberra.

Ms Rizquallah said tenants in standalone houses were looking to negotiate lower rents or find cheaper alternatives.

"Because a lot of people have signed their leases with a high rate [of weekly rent] they're looking around and seeing that the prices for similar houses in the same or similar areas are lower," she said.

Ms Rizquallah is spending more time managing landlords' expectations, particularly when they hear about the tight rental conditions in Sydney and Melbourne.

"They've got this belief that it'll be easy to get tenants," she said.

"However, I'm forced to turn around and say, 'Look, I'm sorry, but Canberra has its own climate. It's not the same thing at all'."

Wright and Denman Prospect recorded the biggest falls in median house rents, with declines of 9.7 per cent and 9.8 per cent, respectively.

The weekly median rental value for houses was $850 in Wright, a discount of $91, and $894 in Denman Prospect, down $95.

Coombs followed with a decline in median house rents of 8.8 per cent to a median of $845 per week, a discount of $81.

House rents in Gilmore dropped by 7.9 per cent to a more affordable $657 per week, while Weetangera house rents fell 7.2 per cent to $753 per week.

Looking at the weekly medians, the most affordable rental properties could be found in Theodore, where the median rental value for houses is $614 per week.

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Belconnen had the second most affordable median rental value at $621 per week, followed by Waramanga at $622 per week.

Less than 10 suburbs recorded a decline in unit rents, with the largest a fall of 2.9 per cent in Lyons.

The decline took Lyons unit rents to $483 per week, making it the most affordable suburb for renters.

The next most affordable suburbs for unit rents were Chifley at $503 per week, Hawker at $512 per week and Mawson at $527 per week.

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