Vancouver Island investors, home-owners worried about finances during pandemic
VICTORIA -- The COVID-19 pandemic has had a devastating impact on life on Vancouver Island, but it’s also hammered the economy, sending stock markets tumbling and forcing many to fear for their personal savings and finances.
Aviv Guy, 28, runs a business in Victoria’s Cook Street Village, and says although he doesn’t have a mortgage, he and his friends are all worried about the stock market.
“I talk to friends and they say the bottom [of the market] is here, but there’s no way to know and I don’t think we’ll see the bottom anytime,” Guy says.
Despite concerns about plummeting markets, experts advise that now is not the time to panic and sell to avoid mounting losses.
Sybil Verch, a financial advisor at Raymond James, says panic is a natural reaction, but investors need to stay the course.
“Human nature is that people are starting to get a little bit emotional and panicky and thinking about selling or maybe selling,” she says.
When it comes to mortgages, banks are allowing some people to defer payments or to refinance, allowing them to have lower payments, spread out over a longer period, allowing people facing unemployment to access much-needed cash for groceries or bills.
“Right now at crunch time, cash flow is king,” says Verch. “So if deferring a few months just creates that comfort, a few months isn’t going to make or break anyone.”
While deferring a mortgage may be necessary, it comes with a price that is higher down the road.
“You still do owe that money and the banks are still going to charge you interest on that money,” Verch says.
“So it will extend your amortization period and you will pay a little bit more interest over that period.”
Still, there is a silver lining for many as a result of the travel bans and closures of shops and restaurants.
“People aren’t spending very much money right now, so a lot of those expenses have automatically been put on hold for the time being,” she says.