Log In


Reset Password

Recession, what recession?

Gisborne residents shopping local and snapping up big-ticket items, such as cars, houses, spa pools, and kitchen and bathroom upgrades. Andrew Ashton investigates . . .

Earlier this week it was confirmed that New Zealand is effectively in recession, with a 1.6 percent drop in GDP in the first quarter of the year — before the real Covid economic pain hit in this current quarter. However, The Gisborne Herald's Chief Reporter Andrew Ashton finds out it might not last long, if the rest of the nation echoes what seems to be a spending bonanza in Gisborne.

A recession was forecast even before New Zealand came out of Covid-19 Level 4 lockdown, but that has not stopped Gisborne residents from partaking in a high-end spending spree, with new cars and spa pools at the fore of a host of big-ticket items being snapped up.

Gisborne Chamber of Commerce president Paul Naske said key industries in the region seemed to be doing well, and he highlighted the importance of not “talking ourselves into a recession”.

“On the one hand, I think it is great that people are seemingly concerned and they are getting out there, shopping locally and not talking themselves or the economy into a recession before we need to. On the other hand, I think everyone should keep one eye on the horizon — but in reality, at the moment, most major industries in the region are doing at least OK, and some are experiencing booms.

“I suppose a lot of people must be feeling safe in their jobs, which is a good thing, and interest rates are low and getting lower so this all helps.

“Long may it last — but let's keep an eye on the horizon.”

Enterprise Cars' new vehicles sales manager Steven Shields said demand for new cars had been a fraction better than before the Covid-19 lockdown.

“It's good. We're certainly not unhappy with the way things are panning out, so far,” said Mr Shields.

“Obviously, there are a number of people who may have planned overseas holidays and obviously can't travel at present, so have decided to buy a new car and thought ‘hey, while we can afford it, let's do it'.

“There's also the possibility that new cars will increase in price due to supply issues. Factories have been shut for a period of time and those factories also have to recoup some of the costs they have incurred. So, that's going to mean a potential increase in prices.

“The other aspect of that is freight costs. Freight costs have all gone up, so if you want to buy some item from overseas, it's going to cost more because the freight is not as regular. All those things are showing signs of increase in expense, which mean now is probably the best time to get into it.”

Mr Shields also pointed to low interest rates at banks and car finance also being low.

“Everything is showing positive signs and we are more than happy.”

Also spurring sales on was the exit of Holden from the New Zealand market.

“We've been having a Holden final clearance sale and on that too, the pricing is really good and we are powering through a heap of stock. We are very close to the end and people are smelling blood. There are some good buys to be had so a lot of people are taking advantage of that as well.”

Gisborne Motors' new cars sales manager Rod Husband agreed things were much better than had been expected.

“It has been extremely busy the whole month, both for quoting and for vehicles that have been sold. It's probably running above an average month for us here.

“A lot of it is business-related but we have noticed there have been two or three private sales to people who would normally take a world trip or a boat cruise and aren't able to do so, so they have put their extra bit of money into a new vehicle — which is helpful for the industry.”

Mr Husband said Hawke's Bay colleagues within the Ford Motors Group were also doing “extremely well”.

“Sales and inquiries are definitely way above what we anticipated coming out of the lockdown.”

White Pointer Boats' managing director Rex Briant said it was hard to tell if there was a rise in sales for boats but he was pleased to see there had been no cancellation of existing builds.

“It's not a high-production game . . . so it's hard to gauge. We had a lot of orders prior to the Covid-19 lockdown and we received no cancellations so we can only be optimistic about the future.”

Buying big-ticket items in place of trips overseas

Houses are another big-ticket item in demand.

Last month, four houses worth $1m or more were sold in the district. That doubles the region's previous monthly record for $1m-plus sales.

“We just sold an apartment down on Customhouse Street for $925,000 and have just listed another property which will probably reach $1m. We've already had strong inquiry on that,” Gisborne realtor Bronwyn Kay said.

“I wouldn't say people are just going shopping for high-end buys, but we are still getting a great deal of interest.

“We now have buyers who are waving $2m around, which is interesting for Gisborne.”

A lot of the lower-end property was selling because people did not think they were getting good returns by just keeping it in the bank “and we've really had a field day down there over the past four weeks”.

“I think people just want the economy to be OK — we all just want to do our bit and shop local.”

Spa and Pool Warehouse owner Simon Hall said he had already sold five spa pools and put that down to a combination of post-Covid deals and people having money to spend after cancelling overseas trips.

“Once we were able to open the doors again, we definitely moved all our stock. For us to sell five spa pools in a week and a half is pretty good-going.

“Most definitely, ‘staycation' seems to be the new word. People have had trips cancelled and got refunds, so they are spending the money on something else to make them feel happy. It's a bit of a shot in the arm. We were able to pay for a forklift so that goes back to someone else in the local economy — that's how it works.”

Mitre 10 Gisborne owner/operator Geoff Taylor said high-value items were flying off shelves there too.

“We have seen an increase in the sales of high-value power tools and a lot of inquiries from people looking to upgrade their kitchens or bathrooms.

“We are putting this down to either people having saved money during the lockdown and looking to spend now, or not travelling overseas so they are spending that money in those areas instead.

“Sales of wood-fires are higher than last year and all products related to gardening continue to move fast. It seems there are a lot of people focused on how their gardens are looking.”

TAKING THE PLUNGE: Spa & Pool Warehouse customers Lynda and Phil Collier pick out the colour options for a spa pool with shop owner Simon Hall. Picture by Liam Clayton

  1. Graham Willers, Waikato says:

    I have to say I’m certainly not experiencing any downturn in new painting contracts for my little company. Not yet anyway. The phone has been ringing off the hook since we went to level 4.
    Anecdotally, some clients have literally said they are spending their holiday money on home maintenance this year.
    Early days I know, but so far so good – my main problem is finding suitably-skilled painters to employ, as I can’t meet demand at present.