South Korea sees real wage decline amid rising inflation and surge in high‑price apartment sales

In May, South Korea's real wages fell 1.4% year‑on‑year as nominal wages rose only 1.7% while consumer‑price inflation accelerated to 3.2% in June. The Labor Ministry warned that if nominal wages do not outpace the 3.2% price rise, real wages could decline for a third consecutive month. The slowdown is linked to a rise in temporary and daily workers, reduced special bonuses, and the lowest post‑COVID nominal wage growth.

At the same time, Seoul’s high‑price apartment market experienced a sharp uptick in April‑May. Transactions for apartments priced above 15 billion won accounted for 28% of all deals in May, the highest share of the year, and sales of units above 30 billion won also rose sharply. The surge was driven by owners rushing to sell before the government’s upcoming increase in capital gains tax and a proposed high‑value property holding tax. Analysts expect the volume of luxury sales to fall after the tax changes take effect, shifting demand toward mid‑price housing.