Capital city rental prices have fallen 0.2 per cent over the past 12 months, in a worrying sign for a property market bloated with investors.

Key points: Rents have dropped 15.6 per cent in Darwin and 12.8 per cent in Perth from peak levels

Rents have dropped 15.6 per cent in Darwin and 12.8 per cent in Perth from peak levels Melbourne, Sydney, Canberra and Hobart recorded modest annual rental growth

Melbourne, Sydney, Canberra and Hobart recorded modest annual rental growth Real estate advertiser Domain says it expects "upward pressure" on rents in most capitals

It is the first time in the 20-year history of CoreLogic RP Data's Rental Review that it has recorded annual rental rates falling and it highlights the patchy nature of the market.

There were significant, and unsurprising, drops in resource-exposed towns, with Darwin rents plummeting 11.5 per cent and Perth dropping 8.4 per cent over the past 12 months.

Darwin rents are now sitting more than 15 per cent below their peak levels, while Perth is off almost 13 per cent as the end of the resources boom sees population growth in these cities stalling.

Even in the large east coast capitals, rents were barely keeping up with general inflation - Melbourne rents rose 2 per cent, and Sydney picked up a modest 1.4 per cent.

Over the month of March, combined capital city unit and house rents picked up, but CoreLogic RP Data researcher Cameron Kusher said that is likely to be seasonal demand and he does not expect the increases to continue.

"The extra accommodation supply, as a result of the current building boom, along with the recent record high levels of investment purchasing is adding substantial new dwelling supply to the rental market at a time when the rate of population growth is slowing from quarter to quarter," he observed.

Data from the Bureau of Statistics show that dwelling approvals are sitting around record highs, indicating construction activity is set to deliver tens of thousands of additional units to the market.

"In all probability, there won't be much scope for landlords to lift rental rates given current conditions have given greater negotiation opportunities to those in rental situations," said Mr Kusher.

Contradictory Domain report predicts rising rents

The comments counter research from Fairfax's real estate advertising website Domain, which predicts rents in most capital cities "will continue to rise".

"Despite the recent influx of home building, we can expect to see upward pressure on both house and unit rents in most capital cities continuing in the foreseeable future," said Domain chief economist Dr Andrew Wilson.

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"It has been a positive quarter for investors in Melbourne with unit rents rising to record levels and vacancy rates falling, despite an unprecedented new apartment boom."

Domain's data shows the only way is not up for rents though, the December quarter report shows Sydney unit rents falling from $510 to $500 per week over the period before bouncing back in March.

Even if rents are rising, returns for investors are not looking so good.

The two most expensive markets - Sydney and Melbourne - have seen rental yields fall from 3.6 to 3.4 per cent and 3.3 to 3.1 per cent respectively according to CoreLogic RP Data.