01/15/2015 09:24 EST | Updated 03/17/2015 05:59 EDT

Canadian home prices rise 3.8% to $405,233 average in December

Home prices and sales in Canada rose last month compared to the previous year, but a month-to-month drop in sales suggests a cooling market.

According to the Canadian Real Estate Association, prices inched up an average 3.8 per cent on an annual basis to $405,233 in December. That represents the smallest increase since May 2013. Sales registered a stronger showing, up 7.9 per cent across the country and above the previous year's levels.

From the previous month, though, sales fell 5.8 per cent on average, with declines in nearly two-thirds of all markets. 

The western markets of Calgary and Edmonton suffered the worst drop, suggesting the plunging price of oil is starting to impact those housing markets. 

“Given the uncertain outlook for oil prices, it’s no surprise consumer confidence in Alberta softened and moved some homebuyers to the sidelines,” said CREA chief economist Gregory Klump.

Still, even the consistently hot market of the Greater Toronto Area experienced a sales decline of five per cent.

For all of 2014, more than 480,000 homes traded hands — the strongest annual level in seven years.