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The skyline of Vancouver. Average home prices have fallen 12.4 per cent in Vancouver over the past year, according to the Canadian Real Estate Association.Jeff Vinnick/The Globe and Mail

Canada's housing market looks to be moderating in many parts of the country, but there's one place that requires a stronger word.

In Vancouver, market metrics are painting a picture of sharp correction.

Average home prices have fallen 12.4 per cent in Vancouver over the past year, according to the Canadian Real Estate Association (CREA). Unit sales are also way down, showing a 38 per cent decline since February 2011, according to Toronto-Dominion Bank economist Francis Fong.

As a result, it seems fewer Vancouverites are willing to put their home on the market. New listings fell 5.4 per cent over the past 12 months as homeowners likely feel they can no longer count on obtaining a sky-high price for even a modest home.

But a closer look at the Multiple Listing Service (MLS) Home Price Index, which tracks the change in prices for same-home sales in the five major real estate markets in Canada, shows prices in Vancouver are actually 0.64 per cent higher than last year.

The MLS index measures price differences over time between comparable homes -- townhouses to townhouses, mansions to mansions and so on. Using this metric, home prices fell a modest 0.74 per cent between June and July .

What this means is the kinds of homes now being sold in Vancouver is changing. Fewer multi-million-dollar properties are finding buyers, and it's more modest condos and townhouses seeing action.

"Here, we're really getting in to the question of foreign investment," Mr. Fong said. "Vancouver is the epicentre of the big question of what kind of impact is foreign investment having [on the Canadian real estate market]."

Anecdotally, market watchers know a lot of those high-priced properties were being bought up by Asian investors in the past. Now, a Chinese economic slowdown that has seen the rate of growth in the country decline for six consecutive quarters could be putting a damper on the spirits of these investors, making them less likely to lay out the cash to buy foreign real estate, Mr. Fong said.

"There's no data on the issue ... [but] it's definitely a reasonable explanation," Mr. Fong said.

Chinese export growth plunged to an annual rate of 1 per cent in July, after reporting 11.3 per cent in June, and profit at China's largest state-owned companies dropped 16.4 per cent in the first half of 2012 compared with last year.