"He's a lawyer at a major law firm, so his identity is verified. There's no way he'll miss rent payments."
A, a worker in his 30s, recently had a bewildering experience. After viewing an apartment for rent in Ichon-dong, Yongsan-gu, Seoul, he walked out to find five groups of prospective tenants waiting at the door. A real estate agency representative was on the phone with the landlord, enthusiastically briefing them on candidates' occupations and incomes. "In the end, the lawyer was selected as the tenant," A said. "With fewer jeonse (lump-sum deposit lease) and monthly rental listings available, I felt like I had to audition just to rent an apartment."
According to data from real estate big data firm Asil on January 8, jeonse and monthly rental listings in Seoul totaled 30,345 units, down 11.1% (3,776 units) from a month earlier. Dongjak-gu saw the largest decline at 30.8%, while Songpa, Yangcheon, Guro, and Gangbuk districts also experienced shortages. The decline comes as high-intensity regulations continue, including the end of capital gains tax deferrals for multi-home owners and restrictions on mortgage extension, leading to increased sales but fewer rental listings.
As rental listings plummet, landlords selecting tenants has become common across the market. B recently found a jeonse listing in Dongjak-gu priced 10 million won below market rate but failed to secure a contract. The landlord specified wanting "a dual-income couple without children or pets." B, who has children, said, "I've heard of no-pet policies, but I was baffled by the requirement of having no children."
The head of C Real Estate Agency in Seongbuk-gu explained, "With few jeonse listings available, lease contracts are being made with landlords having the upper hand over tenants. Some landlords specify their preferred tenant conditions from the moment they list their properties."
Amid this trend, services that score and rigorously screen tenants have emerged. The Korea Housing Landlords Association launched its "Secure Monthly Rent" service on January 3. The service scores tenants' ability to pay monthly rent based on their financial information and provides the results to landlords. "With the tenant's consent, we compile scores based on approximately 150 data points, including deposit payment history," said Sung Chang-yeop, chairman of the Korea Housing Landlords Association. "As monthly rent becomes the 'new normal,' there was demand for landlords and tenants to safely verify and check each other."
The association is also reviewing additional measures, including the ability to check recommendation records from previous landlords. While some criticize the service as an invasion of tenant privacy, the association maintains there is no issue since such services are common overseas. In the United States, landlords request credit scores, income verification, criminal records, and references from previous landlords. In Germany, where tenant protections are strong, landlords select tenants through document reviews and interviews. This rigorous screening exists because once a contract is signed, tenants typically stay for more than 10 years.