Commercial Rental Monitor Q4 2012

Rental payment performance by commercial tenants during Quarter 4 of 2012 remained surprisingly steady, despite obvious and frequently documented pressures on the general economy.

While the number of commercial tenants in good standing peaked at 84% in Q3 (made up of sub-categories Paid on Time 61% and Paid Late 22%) the numbers softened negligibly to 82% in the final quarter of 2012 (Paid on Time 61% and Paid Late 21%).

Delinquencies also remained similar to the previous quarter with 11% Partial Payments and 7% in the Did not Pay category. However, further examination of the data tells an interesting story within the Provincial and Rental Value sub-categories across overall collection trends.

Residential Rental Monitor Q4 2012

Overall, tenants in good standing remained unchanged at 83% for the final quarter. The sub-categories highlighted another slight improvement in the Paid on Time category to 72% (up from 71% the previous quarter and 68%year on year). The newly introduced Grace Payment category opened at 2% with Paid Late dropping to 9% (from12% the previous quarter and 13% year on year).

Taken within the context of continuing consumer credit deterioration in the broader economy, this begs the question why residential tenant payment behaviour has bucked the trend with improved rent collections. This is probably due to the industry's access to quality rental specific credit information, which enables rental agents and landlords to pre-select quality tenants. It therefore follows that the payment trends of better qualified tenants will show improved payment trends.