Real Estate businesses say they are the unacknowledged sector of the economy as their businesses feel the worst of the pandemic-led economic downturn amid a general slump in the property market.

The Samoa Observer spoke to several agents and others in the property market to take the temperature of a sector of the economy often overlooked in write-ups about the devastating effect on hospitality and tourism. 

“Due to the borders being closed off, a lot of the overseas buyers have dropped off,” Mrs. Rosita Brighouse Slaven of Samoa Realty said. “

Yet she also feels that the good thing that came about, was that from the drop of overseas buyers, it opened up the market for the locals.”

Samoa Realty is the biggest real estate company in Samoa. Mrs. Slaven said that she feels it more than the smaller companies because of the size of her overheads, staff, her sales and marketing, and other expenses. 

Despite that, she says she is still keeping all her staff and pays them minimum wage while they wait for buyers. 

The major financier for the local buyers is N.P.F. 

“The Samoa National Provident Fund has played a big role in financing properties for a lot of the local buyers so the banks have started competing again, which is a good thing,“ she said. 

“With the overseas market dropping, because they weren’t there per se, the high end properties slowed down.

“But in 2020, it was busy with local customers. But this year has slowed down substantially. Since 2020, there have been a few locals, but I think all the people who could afford to borrow have already done so. That means the market has been exhausted. “ 

According to Mrs Slaven, the new trend of buyers wanting to pay lease costs on properties on a month-to-month basis but most clients do not want to take the risk. 

But she said there is good news in that the local market is becoming more sophisticated in handling their purchases.

“We encourage them to pre-qualify themselves before they come. That way they have a budget and we can process and find them something,” she said.

“Some people are really up to par now and that is what we are trying to encourage as it safeguards the seller as well. “ 

Mrs Slaven said that the Chinese have entered the local market, especially on the commercial side but not million-plus tala properties because they are not central. 

The areas outside of town like Lepea, Alamagoto, that are still below a million tala are the ones that Chinese buyers seem to be focused on, she said.

When asked about the state of the real estate market for the next few years, Mrs Slaven said: “The real estate market has a 10 year cycle. We are in a slump and the prizes are going to drop. The time it peaks is when the prizes will go very high. Our peak was in 2019. “ 

“What is happening now is that the market prices are going to drop and so we see that by 2025 it will be hard for us. There are a lot of properties coming on the market now, so it is going to be a buyers market.” 

“ There is a certain market out there but it is a matter of us finding an investor who can come in to do a subdivision to cater for the new market, then we can move properties. 

“ Real estate also affects the local market so a lot of the higher market went empty because a lot of the expats left.

“ Up to now since 2020 a lot of the high end rentals are still empty. We have five on the market but there are no buyers. I doubt an investor is looking at it right now. “ 

A few hotels are also wanting to sell but we recommended that now is not the right time to sell, if you are not in a hurry, so hold off for another year or two. 

We have had clients who have had to drop their prices so we hope to get some properties. 

We have people in quarantine from overseas who are still calling and emailing us. So definitely the overseas market is still enquiring but the commitment is not there unless they are physically here to visit and view the properties then they can commit.

Mrs Slaven was not doubtful of the potential of the borders being open to the success of the real estate business. 

“I am sure when borders open then the overseas market will move again,” she said.

Raema Von-Reiche owner of the Navigator Enterprise and Real Estates said that it has been difficult to find other ways to make ends meet. 

The firm focuses on property management as well as selling real estate. Pre-covid they were relying a lot on AirBnB, and we had a lot of houses listed for tourists who would come and stay for a week or three weeks. They also looked after the guests’ needs like tours and rental cars.

“We managed the properties for the owners and ensured to check and clean everything,” she said. 

When COVID-19 hit, they had to change their staffing and their strategy. So they convinced the owners to maintain their homes for a year. 

“Now we are trying to rent to the local market,” she said. 

“The prices are much lower than the rates they used to charge the tourists.” 

Despite the prices being halved from their usual top dollar rates, Von-Reiche says that it is better than nothing. 

For real estate, they have a lot more inquiries from Samoans overseas who are asking for properties. Raema thought that prices would be dropping but she thinks they are going up soon. 

She suggested that if people are looking for properties, then now is the time to buy them. 

Of their staff, they have only laid off one gardener but have hired a contractor who only comes in to work when she is needed. 

Agreeing with Mrs Slaven, she also notices that there are not many Samoans overseas buying new land despite her regularly fielding inquiries.

Sheree Stanley Stehlinm, owner of SS Real Estate Services Samoa and  Salon Sheree, has been operating for three years as a real estate agent. 

She said that while the market has been slow, there are still people with money who can buy.

“ Access to finance is not always good,” she said despite noting some banks making attractive lending rates available. 

She foresees that next year will be a buyer’s market because there are a lot of properties coming up for sale. 

“ Almost every day, someone wants to sell,” she said. 

She also notices that there are quite a few commercial properties coming up on the market indicating a sign of bad businesses, or perhaps people wanting to rid themselves of the burden of their loans. 

 A lot of houses too are being sold by people who bought them but want to sell them again all because of the downturn of the economy due to COVID-19. 

There are a lot of pending settlements, issues with banks, and lawyers which she finds frustrating given the situation of the economy. 

She is currently waiting for three settlements and the government is closing for the holidays, but the banks do not wait. 

She sold Apia Bottling to a Chinese businessman. But she notices that they do move outside of central areas because they know that they can draw business to them, with their long hours and cheap prices. 

Sheree Stehlin said that the real estate business was very good when the borders were open but now her salon is what keeps her going as she is fortunate to have regular clients whom she has had for several years, some of them as long as the 43 years she was operating as a salon owner.