Nominal wages in the eurozone have risen sharply over the past two years. However, they have not risen sufficiently to compensate for high inflation. Consequently, real wages contracted in every single quarter between the first quarter of 2021 and the second quarter of 2023. From the second half of 2023, the drop in headline inflation favoured a marginal increase in real wages – although this was not enough to offset real wage losses of the preceding two years. In addition to the rise in financing costs, this has amplified the decline in purchasing affordability of residential real estate.
Looking ahead, wage growth in the eurozone is…
