A Lake Rotoma resident said the corner was notorious for crashes.
Shane, who would only be known by his first name, said he lived across the road from the corner for about four years before moving down the road a few years ago.
In that time there were often people losing control of their cars on that corner, he said. "I"ve seen a few accidents but nothing where they've gone right in."
Shane said there had been a metal safety barrier recently installed.
"Since that happened, we haven't had many crashes - until now. It's pretty unreal."
Shane and his son-in-law had been travelling from his home to visit his daughter, who also lives at the lake, within minutes of the crash, he said.
"We had actually driven past the crash site just 10 minutes before we heard the sirens."
Shane spoke to the Rotorua Daily Post while watching the car wreck being pulled from the water.
He said the corner had a layby where people diving or swimming often parked their cars.
"It would've probably saved their lives, if there were cars parked there."
Lake Rotoma is the fourth-largest of the 11 lakes in the Rotorua Lakes district.
Meanwhile, police have confirmed one person is dead after a people mover hurtled down a bank next to SH1 in North Otago today.
A police spokeswoman said the single-vehicle crash happened on Main Rd (SH1), Maheno, and police were called at 10.06am.
Police confirmed the sole occupant of the vehicle was found dead at the scene.
Police remained at the scene and the investigation into the cause is ongoing.
A reporter at the scene said the van/people mover was about 10m to 15m from the road in a paddock and badly damaged.
Debris was spread across the paddock.
It appeared the car was travelling north when it left the road close to the entrance to Maheno.
