Capital city home prices fell again in March, but rents have surged over the past six months.

The latest RP Data-Rismark Hedonic Home Value Index shows capital city purchase prices for houses and apartments declined an average 0.2 per cent seasonally adjusted during March.

Over the March quarter, capital city home prices slid 2.1 per cent, and are now down 0.6 per cent over the year to March.

House values outside the capitals did not fare much better, rising just 0.2 per cent last month, falling 1.8 per cent over the March quarter, and slipping 0.5 per cent over the past 12 months.

The weakest performing capital city housing market was flood-ravaged Brisbane, with prices down 4.6 per cent over the 3 months to March.

Perth prices were down 3.4 per cent, and Darwin was down 2.5 per cent over the quarter.

RP Data's research director Tim Lawless says that is mainly payback for over-exuberant price growth in the years preceding the global financial crisis.

"We've seen Perth, for example, in 2006 price growth reached about 46 per cent in one year, so they certainly did overshoot the mark, and Brisbane similarly has seen very strong gains since 2001 all the way up to 2007," he told ABC News.

"So in many ways these markets are letting the other markets catch up to them."

On the other side of the ledger, Sydney recorded a modest 1.1 per cent slide in home values over the March quarter and Canberra was down 1.3 per cent, with the two cities having the highest median dwelling values of $500,000 and $511,000 respectively.

Mr Lawless says the across-the-board weakness in property prices is largely due to a surge in the number of people looking to sell, while buyers remain cautious in the face of higher interest rates.

"We are seeing a lot of stock being added to the marketplace, and that's probably part of the reason why there isn't very much price pressure around at the moment," he explained.

"The amount of properties being advertised are about 30 per cent higher than what they were at the same time last year, we're seeing vendors having to become more flexible on their prices, they're discounting their asking prices at the moment by about 6.5 per cent compared to 5.2 per cent at the same time last year, and properties are taking about 59 days to sell... compared to about 45 days at the same time last year."

He says those conditions are likely to continue until at least the end of the year.

"We will see some further declines in property markets, particularly in those weak markets that we have seen, particularly in Perth and Brisbane, but then again looking at Sydney for example, the foundations do seem to be quite resilient and we'll probably just see flat conditions," Mr Lawless added.

Rents on the rise

However, the news is not all bad for housing investors, with RP Data's figures showing rents up 4.6 per cent over the past six months.

RP Data analyst Tim Lawless says the rise in rents combined with the fall in home values has pushed up rental yields for investors entering the market now.

"That's probably the only good news for investors is that absolutely there is a lot of pressure on rents at the moment," he said.

"Rental yields are also showing improvement across most capital cities - Darwin, Canberra, Brisbane are still the leading cities for providing a rental return."

Darwin and Hobart had the highest rental yields of 5.4 per cent for houses, while Darwin's 5.7 per cent rental yield for units also led the other capitals.

Melbourne had the lowest rental yield of 3.8 per cent for houses and 4.2 per cent for units.

The national average rental yield was 4.9 per cent for apartments and 4.2 per cent for houses according to RP Data.