Moody's Investors Service yesterday warned that record low rental yields on houses in Australia's two biggest cities, Sydney and Melbourne, and the consequent increase in costs for servicing a property investment, was making investment properties less affordable."Deteriorating affordability increases the risks for Australian residential property investors and therefore for residential mortgage-backed securities backed by loans on investment properties," JP Truijens, a Moody's assistant vice president, said.According to the report, deteriorating affordability reduces investors' flexibility around refinancing or restructuring their mortgage loan terms, giving them fewer options should they experience hardship.The decline in rental yields leaves residential property investors more vulnerable to risks such as loss of income, interest rate increases, vacancies or rent reductions, and therefore increases their probability of default.Moody's said the level of 'cashflow' losses suffered by residential property investors had increased over the past three years and made investors dependent on greater levels of house price appreciation to cover their losses than in previous years.The negative impact of low rental yields and the deteriorating affordability of servicing property investments will be most evident in RMBS issued in 2016 and 2017, with the bulk of the collateral in these transaction comprised of investment loans originated in 2014 and 2015 - that is, at the peak of the recent house price cycle.It's not likely to get any easier, either. Moody's said it does not expect to see any major improvement in the cost of servicing residential property investment loans in the near term.