Weekly asking rents fell further in August as a result of increased supply and slower population growth, pulling the yearly rate of growth to a 20-year low.

Rents were unchanged in Sydney but fell in every other capital city, pulling the aggregate monthly pace of decline to 0.4 per cent from 0.3 per cent in July, the latest CoreLogic RP Data figures show.

The year-on-year growth in asking rents fell to 0.7 per cent from 0.9 per cent in July, the lowest since records started in December 1995, the data provider said.

Increasing housing production was one factor driving rental yields to a record low in August, CoreLogic RP Data figures show. Tamara Voninski

"The reasons behind this lacklustre result for the rental market can be attributed to the extent of the current construction boom across the capital cities and slowing population growth," CoreLogic RP Data research analyst Cameron Kusher said. "Added to this is the surge in investor participation in the housing market, which is contributing to weaker rental growth by adding to the rental stock."

There are some signs of a slowdown to come in construction, but the pipeline for new housing remains strong. Housing approvals rose 4. 2 per cent in July as the number of apartments, townhouses and semi-detached homes bounced back from a dip in June, with Sydney and Melbourne leading the charge.