Pandemic strikes Real Estate hard
Tourism-related businesses are not the only ones suffering as a result of the coronavirus pandemic-imposed lockdowns.
Real Estate and property sale agents in Samoa have also been squarely affected, with many of them reporting struggles with sales since COVID-19 locked the borders and introduced several restrictions. They agents say the sale of properties, mainly houses, has slowed down. Where there have been sales, they have had to reduce the prices to cope.
The Samoa Observer contacted three real estate agents in Samoa who all emphasised that the drop in sales is due to the closure of borders whereby the estate industry had relied heavily on buyers from overseas who either buy properties for their families in Samoa or are relocating back to Samoa.
Falemalu Failo Crichton, of Real Estate Samoa, said the bulk of his business are people from outside the country.
"There are still a lot of enquiries from overseas but the problem is that they cannot come over to view the houses," Falemalu said
"With the sales, we’ve noticed an inclination for the vendors to bring the prices down a bit but not much."
This is to address the declining income of some families.
But Falemalu says that they are expecting a rise in sales of lands from now to probably next year.
He added that the Samoa National Provident Fund's decision to put its investment lending on hold has not helped matters.
"In terms of the sales of land, it’s still solid. We’ve had a lot of buyers that are from overseas," he added
"If N.P.F. did not stop lending to its members, I would highly say that it would’ve been the same. But because N.P.F. stopped lending to its members, it actually really made the sales slow right down.
"We probably had more than 10 contracts which were cancelled because N.P.F. put a hold of lending to members. It really affected our business hugely because N.P.F. stopped lending to its members. But if they didn’t, the money would come in and be generated in the country."
Contacted for a comment, the General Manager of S.N.P.F., Pauli Prince Suhren, confirmed that due to the Fund’s emergency planning, investment lending, which covers land loans, home loans, community loans and commercial loans, were frozen as a result of the declaration of the S.O.E. orders.
But Pauli revealed that the Fund's investment lending has recommenced, beginning this week Monday 3 August 2020, on a "restricted basis" as the Fund continues to monitor the global and domestic impact of COVID-19.
The news would be music to the ears of Real Estate agents like Raema Von Reiche, of Navigators Properties. She echoed the concerns expressed by Falemalu.
"The market has totally changed. It has become a lot less money around," she said.
"It’s affected us because we don’t have anyone coming in and we have a lot of rental houses sitting empty right now because local people can’t afford those high rents. And local people don’t need to rent because they already have houses."
Raema said that if this lockdown will continue on, they may have to lay off some of their staff as it is becoming more difficult for them to pay their staff.
"If this keeps going on then maybe in the next 3 or 4 months we’ll have to lay off our staff," she added
"We’re trying to keep people employed out of savings. The money we got in the bank, we’re using it now."
Ugapo James Eves, of Harmonious Real Estate, has not made a sale since the state of emergency was enforced.
Only a few local clients who were interested in their properties but still, no sale was made.
Harmonious Real Estate also relies on the overseas market and overseas families when they travel back to buy properties for their families.
According to Ugapo, sales are stagnant at the moment for them because of COVID-19, however, they have also had to reduce their prices.
"Some of the properties were reduced in price as they’ve been on the market for quite some time so the owners wanted to reduce to try and make an urgent sale," he added