There's a theory that hosing down investor demand should have no impact on rents. That's because in theory for every property that isn't bought by an investor, an owner-occupier buys instead, and thus the balance of supply and demand for rental properties remains unchanged.
In the real world capital city property markets don't work like that. In reality, many are renters either by choice or by circumstance, such as new graduates, transient employees, international or interstate visitors, and other folk who prefer taking a rental close to the city to ownership in the outer suburbs. Many others simply don't have an available deposit saved, so buying is not an option for them.