Canadian home prices rose to another record high in July but moderating gains provided more evidence that the real estate market is cooling, according to a national benchmark index.

The Teranet-National Bank home price index showed that overall prices rose by 0.7 per cent last month — cooling from the 1.0 per cent monthly gains seen in each of the previous two months.

The index hit a new high for the third consecutive month.

But in Vancouver, prices fell 0.5 per cent from June levels — the only one of the 11 cities the index tracks that showed a price drop.

On a year-over-year basis, prices in July were up 4.8 per cent from a year earlier. But that was the eighth consecutive month that year-over-year gains have decelerated. "Further deceleration is possible in August," National Bank said in a statement.

Annual price increases in the Toronto market led the market, with homes in Canada’s biggest real estate market rising 9.2 per cent year-over-year — almost double the national increase.

In Victoria, prices fell 0.4 per cent from the previous July.

The Teranet-National Bank home price index is the best-known example in Canada of what is known as the repeat sales method of trying to assess home price trends.

This method of tracking home prices in 11 major markets looks at how the price of the same home changes over time, so that only properties with at least two sales are entered into the mix.

The assumption underlying this process is that each selected property's overall quality remains constant. The statistical model attempts to account for the high prevalence of homes that have been renovated.

But all methods of tracking home prices have tended to show price increases moderating in the last few months.

Market observers have said part of the cooling may be due to recent changes to mortgage insurance regulations that have made it more difficult for some first-time buyers to qualify for financing. Record levels of household debt may also be a factor.