The average price of a Canadian home increased by 9.5 per cent to $474,590 in September compared to the same month last year.

The Canadian Real Estate Association said home sales had declined for four straight months until inching up by 0.8 per cent last month. 

Home sales are now 5.6 per cent below the all-time record level they hit in April, CREA said.

Sales may be slowing, but prices continue to increase, driven higher, CREA says, by high prices in Toronto and Vancouver.

If those two cities are stripped out, the average price of a Canadian home declines by more than $100,000 to $358,884.

Indeed, on a monthly basis the average house price ticked lower in Vancouver due in part to recent moves to dissuade foreign investors via a 15 per cent tax

"It would appear that the trend in the Greater Vancouver Area has in fact bent earlier this year, and excesses are continuing to unwind," TD Bank economist Diana Petramala said.

Prices for single-family homes declined in the Greater Vancouver and Fraser Valley areas declined on a monthly basis for the first time since 2012, CREA said.

"The foreign land transfer tax has helped accelerate that process, completely wiping out foreign investment activity from the market recently. As such, activity is returning to more normal levels, following a year of excessive growth."

Vancouver's market is being targeted by local policy makers, but Ottawa also moved recently on another front to toughen mortgage requirements, which is expected to cool the housing market eventually.

But so far, that`s not showing up in the national numbers.

"Prior to the new mortgage rules, the dominant story in Canada's housing market was the diverging paths of previously white-hot Vancouver and still piping-hot Toronto," BMO economist Doug Porter said. "We are all along the market watchtower now, though, looking for some broad softening in sales the wake of Ottawa's new measures."

"Eventually," Porter said, "this will lead to much more moderate price gains as well."