Sales of residential properties totalled 1,516 for the month, down from 1,649 in August and 2,246 in September 2011, according to the board.
"There's been a clear reduction in buyer demand in the three months since the federal government eliminated the availability of a 30-year amortization on government-insured mortgages," board president Eugen Klein said.
"This makes homes less affordable for the people of the region."
In a bid to help prevent a housing crisis like the one seen in the U.S., the federal government has moved several times over the past several years to tighten the lending rules for home buyers.
The latest rules came into force in July and included a move to cut the maximum amortization terms for government insured mortgages to 25 years from 30.
Despite the sharp drop in sales, the board says its Multiple Listing Service home price index composite benchmark price for homes in the region was $606,100, down just 0.8 per cent from a year ago.
New listings also slipped in the month by 6.3 per cent to 5,321 in September.
However, the total number of home listings on the MLS increased 14.1 per cent from this time last year to 18,350, suggesting it is a buyers' market.
A buyers' market occurs when there is more supply than demand in the market, making bidding wars and sales above asking prices less likely.
Sales of detached properties fell 37.9 per cent to 594, from 957 a year ago, while the benchmark price decreased 0.5 per cent to $935,600.
Meanwhile, apartment property sales totalled 676, down 26.7 per cent from 922 sales a year ago, while the benchmark price dropped 0.7 per cent to $368,600.
There were 246 attached property sales in September, down 33 per cent compared with 367 a year ago, while the benchmark price fell 2.7 per cent to $458,600.
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