Rise in Spain's home prices lags increase in purchases due to glut

Madrid

SPANISH home prices failed to keep up with a surge in transactions as a lingering glut of empty homes weighs on the market. Values rose 1.5 per cent in the first quarter from a year earlier even as purchases increased by 9.4 per cent, according to data published on Tuesday by the National Statistics Institute. Prices fell 0.6 per cent in the period compared with the last quarter of 2014.

"Challenging supply-demand fundamentals in the sector are likely to weigh down on the pace of recovery in house prices in the remainder of 2015 and 2016," said Raj Badiani, an economist at IHS Global Insight in London. "The slower rate of increase in house prices in the first quarter of 2015 was disappointing."