Johnston said he had a CCTV camera, which captured the corner where the crash happened last night.
While it does not record footage, it allowed him to see what happened in live time.
“I could see two cars were side by side,” Johnston said.
“It looked like one car … hit the other car, and that is what forced that car into the flats.”
He said the outcome could have been far worse if the car’s direction had moved by a metre as it would have gone straight into the middle of the family’s flat.
“It is like a miracle. There could have been deaths.”
When Hawke’s Bay Today visited the scene on Friday morning, the residents were not home, and workers were carrying out repairs.
The vehicle came to rest on the lawn after hitting the building and was towed later that night.
Police confirmed the incident happened at 10.10pm on Thursday, and they were making inquiries to determine the circumstances of the crash.
A spokeswoman said the road was temporarily blocked while emergency services attended the scene.