Rents in Australian capital cities are rising at their slowest pace on record.

While Sydney and Hobart were the cities that posted the strongest rent rises in the year to May 31, steep falls in Darwin and Perth kept a lid on the national average.

Mortgage Choice says the proportion of its loan approvals going to property investors fell to a 20-month low.

The latest CoreLogic RP Data rental index shows that average capital city rents rose 1.5 per cent to $488 a week, the weakest rise on record.

"The sluggish pace of rental appreciation can likely be attributed to the ongoing boom in dwelling construction across Australia's capital cities accompanied by record high participation in the housing market from investors," the report said.