5 ways the economic impact of COVID-19 will seep into our day-to-day lives.


The consequences of the coronavirus pandemic have been catastrophic, to say the least.

An economic crisis has unfolded alongside a health crisis, and economic experts are certain we are now entering a recession.

Australians have lost jobs, incomes have decreased, and consumer spending is down.

But beyond the record unemployment rates, how will the economic impact of COVID-19 seep into our day-to-day lives?


Mamamia spoke to Steve Mickenbecker, Canstar’s Group Executive, about just five of the significant ways in which the recession will be felt in our everyday lives.

Watch: A super simple formula for budgeting. Post continues after video. 

Video by Mamamia

Here’s what the finance expert had to say.


A recession is ahead, Mickenbecker confirms, meaning housing prices will fall.

“It almost certainly will happen. It happens every recession: The property market slows down and prices fall.”

Mickenbecker predicts housing prices will fall by approximately 10 to 15 per cent in Sydney and Melbourne, and perhaps a little less so in other capitals.

So, if you had the means, does that mean it’s a good time to buy a house?

“For the right businesses and for the right properties, it can be a great buying opportunity. The problem people have, of course, is recognising where the bottom of the market is, or even close to where the bottom of the market is. You’ll never get that right every time,” the finance expert explains. “It’s very tricky to tell.”


Listen… If you have the money, should you be buying a house right now? Mamamia’s daily news podcast, The Quicky, asks the experts. Post continues below audio. 

And what about the renting market?

“Rent will fall,” Mickenbecker states. “When you’ve cut out a whole bunch of overseas students in the country, a lot of demand for properties has gone.

“So the supply of properties for permanent rental is up, and demand is right down.”

In fact, Mickenbecker had some advice for tenants: “When your lease is up, talk to your landlord about a rent reduction. Your landlord is going to want to keep you, if you’ve been a good tenant, and your landlord will be conscious of the fact that rents have gone down.

“So don’t just renew, look for a rent reduction.”


Retail industries have suffered a devastating consequence of the fallout from the pandemic.

It is expected we will see big discounts from retailers, as they struggle to win their share of consumers’ restricted spending.

What the history of recessions tells us, Mickenberk explains, is that clothing spending will fall.

“The bricks-and-mortar retailers have been on a downward slide now for many, many years. It’s a long-term trend. And during hibernation, we’ve all learned that online shopping is pretty easy.


“They’re going to struggle even more to try win their share of the dollar being spent.”

Mickenbecker says to expect significant discounts from local malls in particular.


coronavirus impact on economy
International travel is still a while off. Image: Getty.

Mickenbecker says this will predominantly depend on whether Virgin Australia survives.

"If they do, we can expect to see quite a battle for the skies and some lower domestic airfares. The airlines will want to encourage people to fly, and they want people to fly with them.


"So we might see some pretty attractive airfares. But if we're left with just one carrier, fares will go up.

Essentially, the survival of Virgin is "the difference between competition and low fares, and fares that go right up".

The finance expert emphasises that international travel will be a long while off. When it is allowed, though, people will likely still be hesitant about the potential risk.

"Assuming not too many of them have gone broke, I expect airlines to be offering some pretty attractive affairs to entice people to go," the finance expert explains.


In March, the ASX 200 dropped 30 per cent from their February peak, which was just weeks prior to the drastic drop.

"They've since recovered a bit, but they're still down 18 per cent from that February peak," Mickenbecker explains. "So returns for the 2020 financial year are likely to be negative for most people.

"The good news, though, is that just because the market's down 30 per cent doesn't mean that your superannuation investment is down 30 per cent because that's not the case. They have quite a mix of investments and a balance, but it varies dramatically," he continues.

The fact is that for many Australians this year will not be positive when you open up the annual statement.


"The good thing is that for younger people, they have a lot of time ahead of them for the markets to bounce back and for them to continue making contributions. They will have several downturns over their life time and they'll have plenty of time to really retrieve their balance.

"The people who will really be hurt are the retirees or the near-retirees who either have been or will be drawing out money from their super when it's at rock bottom."

Interest rates

"Interest rates will be very, very low for a long time." Image: Getty.

"Interest rates will be very, very low for a long time," Mickenbecker tells Mamamia.

This will bring highs and lows, for different groups.

"We have a lot of household debt in Australia and low interest rates mean relatively low repayments for the amount we borrow, which is a positive.

"But then you've got retirees and savers, who are living off savings and term deposits, whose disposable income has been falling now for years because interest rates are so low and they'll stay low.

"Those guys are going to really struggle," the finance expert adds.

It's a rather grim outlook. So what is the one piece of advice he could pass on?

"Your spending will have to fall with your income. There's no two ways about that. So don't wait for the worst to happen.

"Make savings to your household budget right now - that will give your resilience to deal with any problems.

"Look at your insurances, your power and those sort of items and get some quotes. Find out who the better rated insurers are and see what you can save, because it's amazing how saving on those monthly bills can really get you well ahead and approve your budget position."

Sign up for the "Mamamia Daily" newsletter. Get across the stories women are talking about today.