New figures show home prices fell 1.5 per cent in Perth in June but are still higher than 12 months ago.
Overall the RP Data-Rismark Hedonic Australian Home Value Index found home prices fell by 0.7 per cent in seasonally adjusted terms.
This is the biggest decline since April 2008.
Home prices were also down in Melbourne and Canberra 1.4 per cent.
However in all capital cities home prices are still up 10.5 per cent on June a year ago.
Leading the way is Melbourne (up 16.0 per cent) followed by Darwin (up 14.3 per cent), Canberra (up 10.6 per cent), Sydney (up 10.4 per cent), Adelaide (up 9.1 per cent), Perth (up 5.1 per cent) and Brisbane (up 4.5 per cent).
The index is based on Australia's biggest property database including over 280,000 sales during 2009.
CommSec senior economist Craig James said, "Overall housing market fundamentals are positive."
"Population growth is still firm, the job market is healthy, housing supply still lags demand in many markets and wealth is at record highs. So this correction still looks more like the 'pause that refreshes'.
"While the outlook still remains positive, a 0.7 per cent fall in the space of a month is clearly unsettling," he said.