Housing prices dropped 1.1 per cent in September, which also marked the first time since February 2009 that prices declined in all of the metropolitan areas covered by the index.
The index tracks repeat sales of houses in six metropolitan areas using information from public land registries.
Year-over-year price growth also slowed to 7.9 per cent in September, the third consecutive month of deceleration, the report notes, "leaving the 12-month rise the smallest since last January," the Wednesday report said.
However, home prices are still 5.5 per cent higher than their pre-recession peak, says National Bank senior economist Marc Pinsonneault, a far cry from the situation south of the border, where prices are still 28 per cent from their peak.
"September's drop notwithstanding, we do not think that a significant price correction looms in housing," says Pinsonneault, pointing to a balanced new-listings-to-sales ratio and the continuing health of the Canadian economy.
"This being said, the high indebtedness of Canadian households and record home ownership rate argues for a much slower pace of home price appreciation in the coming years."
Shahrzad Mobasher Fard, an economist with TD Economics, said there is "very limited scope" for prices to increased, "given the relatively weak prospects for employment and income growth, along with increases in interest rates.
"Some disparities at the regional level will continue to prevail, however, with cities having lagged the recovery in home prices such as, most notably, Calgary, presenting more potential for an upside if the local economy continues to improve."
Prices fell in September by 2.4 per cent in Halifax, 2.2 per cent in Calgary, 1.6 per cent in Toronto, 0.5 per cent in Ottawa and 0.3 per cent in Montreal and Vancouver, according to the report.
On a year-over-year basis, prices are up 9.2 per cent in Vancouver and Ottawa, nine per cent in Toronto, 7.6 per cent in Montreal, 3.6 per cent in Halifax and 1.7 per cent in Calgary.
