Hobart has led the decline in rents over the June quarter, clocking it largest drop since September 2012, a CoreLogic report shows.

Median rents in the Tasmanian capital went down by 2.3% over the quarter to $454, close to the record-high decline in September 2012 when rents fell due to the weak economic growth and an uptick in unemployment.

Overall, national median rents went down by 0.5% over the quarter. Sydney recorded the most substantial decline next to Hobart at 1.3%. Capital cities have been bearing the brunt of the economic shocks arising from the COVID-19 outbreak. In fact, rents in state capitals declined by 0.7% in the quarter, compared to the 0.2% rise in rents across regional markets.

The report said several rental demand factors, which have been affected by the COVID-19 outbreak, have contributed to Hobart's rent decline.

For instance, the city's workforce has significant exposure in the accommodation, food, arts, and recreation sectors. In fact, 12.7% of Hobart workforce is in these sectors, higher than the average of 9% across other capital city regions.

"Higher rates of job loss in these sectors are likely to have impacted rent prices," the report said.

Hobart has also been affected by owners of short-term rentals listing their properties to the long-term rental market, pushing the supply up and shrinking rents further.

"Additionally, rental affordability was already stretched across Hobart, with households dedicating an average of 34% of their income to service rental payments; the highest of any capital city," the report said.

A separate report from the Real Estate Institute of Tasmania showed that the vacancy rate in Hobart increased to 2.6%. The report also showed substantial declines in median rents — 6.5% for houses and 6.3% for units.