Consumers are set to pay less for some items as coronavirus causes Australia to have deflation, or negative prices, for the first time since the early 1960s. 

Petrol won’t be the only item that gets cheaper as COVID-19 lockdowns are possibly eased in coming weeks.

Clothes, shoes, local holidays, childcare and rents are also likely to become much more affordable as Australians are allowed to leave their homes again for purposes other than buying groceries and medicines, or travelling to work.

Consumers are set to pay less for some items as coronavirus causes Australia to have full-year deflation for the first time since the early 1960s. Clothes (Westfield Parramatta store, pictured), shoes, local holidays, childcare and rents are also likely to become much more affordable as Australians are allowed to leave their homes again for purposes other than buying groceries and medicines, or travelling to work

Consumers are set to pay less for some items as coronavirus causes Australia to have full-year deflation for the first time since the early 1960s. Clothes (Westfield Parramatta store, pictured), shoes, local holidays, childcare and rents are also likely to become much more affordable as Australians are allowed to leave their homes again for purposes other than buying groceries and medicines, or travelling to work

Reserve Bank of Australia governor Philip Lowe is predicting a negative level of annual headline inflation, also known as deflation, for the first in almost 60 years, with crude oil prices this week extraordinarily falling into negative territory. Pictured is the Metro Petroleum service station at Earlwood, in Sydney's inner west, selling unleaded for just 49.9 cents a litre

Reserve Bank of Australia governor Philip Lowe is predicting a negative level of annual headline inflation, also known as deflation, for the first in almost 60 years, with crude oil prices this week extraordinarily falling into negative territory. Pictured is the Metro Petroleum service station at Earlwood, in Sydney's inner west, selling unleaded for just 49.9 cents a litre

Reserve Bank of Australia governor Philip Lowe is predicting a negative level of annual headline inflation, also known as deflation, for the first in almost 60 years, with crude oil prices this week extraordinarily falling into negative territory. Pictured is the Metro Petroleum service station at Earlwood, in Sydney’s inner west, selling unleaded for just 49.9 cents a litre 

Reserve Bank of Australia governor Philip Lowe is predicting a negative level of annual headline inflation, also known as deflation, for the first in almost 60 years, with crude oil prices this week extraordinarily falling into negative territory.

‘The large fall in oil prices, combined with the introduction of free childcare and the deferral or reduction in some price increases mean that it is quite likely that year-ended headline inflation will turn negative in June,’ he said this week

‘If so, this would be the first time since the early 1960s that the price level has fallen over a full year.’ 

Westpac is forecasting a seven per cent drop in petrol prices for the March quarter with unleaded fuel selling for less than 90 cents a litre in some cities.

The bank’s senior currency strategist Sean Callow is expecting the Australian dollar, now buying 63 US cents, to fall below 60 US cents again, like it did in March, as the COVID-19 pandemic caused the steepest global economic downturn since the 1930s Great Depression.

Nonetheless, he expected prices for shoes and clothing to fall, even though these items are mainly imported, as retailers offered discounts to lure cash-strapped customers.

‘It’s lack of demand,’ Mr Callow told Daily Mail Australia on Friday.

Childcare is set to get cheaper with Prime Minister Scott Morrison pledging $453 million for preschools in 2021, in a bid to help one million families. Pictured is an early childhood educator at Helensburgh south of Sydney on April 3, 2020

Childcare is set to get cheaper with Prime Minister Scott Morrison pledging $453 million for preschools in 2021, in a bid to help one million families. Pictured is an early childhood educator at Helensburgh south of Sydney on April 3, 2020

Childcare is set to get cheaper with Prime Minister Scott Morrison pledging $453 million for preschools in 2021, in a bid to help one million families. Pictured is an early childhood educator at Helensburgh south of Sydney on April 3, 2020

‘The importers are paying more for those goods but whether they feel they’ll sell many more if they put up the price, whether it actually gets passed through to the retail level is always open for debate.’ 

CORONAVIRUS CASES IN AUSTRALIA: 6,689

New South Wales: 2,994

Victoria: 1,343

Queensland: 1,026

Western Australia: 548

South Australia: 438

Tasmania: 207

Australian Capital Territory: 105

Northern Territory: 28

TOTAL CASES:  6,677

RECOVERED: 5,136

DEAD: 80

Electronics, like laptop computers, and home office supplies however are likely to get pricier, at least in the short-term, as  components from China remained in short supply with more people working from home.

‘There’s a big surge in demand for home office equipment – that’s pretty much all imported,’ Mr Callow said.

Conversely, childcare is set to get cheaper with Prime Minister Scott Morrison on April 2 pledging $1.6billion over three months to provide free services to one million families.

The government will pay 13,000 childcare centres 50 per cent of their fee revenue and in return the centres must stay open and not charge parents. 

‘It’s a pretty good example of something that only applies to only a certain proportion of the population but given that it’s typically very expensive … compared to a year ago that would be a very large fall in prices,’ Mr Callow said.

Rents are also expected to fall with the government in late March imposing a six-month moratorium on evictions.

Electronics, like laptop computers, and home office supplies however are likely to get pricey as a result of constrained component supplies from China as more people work from home. Pictured is a woman working from home in Adelaide

Electronics, like laptop computers, and home office supplies however are likely to get pricey as a result of constrained component supplies from China as more people work from home. Pictured is a woman working from home in Adelaide

Electronics, like laptop computers, and home office supplies however are likely to get pricey as a result of constrained component supplies from China as more people work from home. Pictured is a woman working from home in Adelaide

‘Any sort of government intervention to keep a lid on costs turns up as a fall,’ Mr Callow said.

Sydney tenants are yielding the most benefits, with house leases falling by 5.7 per cent in April, SQM Research data showed. 

Holidays within Australia were also expected to become more affordable, in the absence of overseas tourists, as COVID-19 travel restrictions were relaxed in coming months.

Westpac said falls in domestic accommodation costs would be among the ‘biggest negatives’ when it came to prices.

Australia’s second biggest bank is expecting official inflation figures, due out on Wednesday next week, to show a minuscule 0.1 per cent rise in the March quarter, with prices expected to fall further in April, May and June.

Westpac said falls in domestic accommodation costs would be among the 'biggest negatives' when it came to prices. Pictured are tourists at Byron Bay on the New South Wales far north coast who are refusing to practice social distancing

Westpac said falls in domestic accommodation costs would be among the 'biggest negatives' when it came to prices. Pictured are tourists at Byron Bay on the New South Wales far north coast who are refusing to practice social distancing

Westpac said falls in domestic accommodation costs would be among the ‘biggest negatives’ when it came to prices. Pictured are tourists at Byron Bay on the New South Wales far north coast who are refusing to practice social distancing

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