'It's going to hit hard': How the coronavirus travel ban is pushing Australia's already-struggling economy into recession - threatening to cause a 40 per cent house price plunge

• Coronavirus outbreaks effect on economy could push Australia into a recession
• China is Australia's biggest source of international tourism but this is in jeopardy
• New health scare occurred as summer bushfires threatened economic growth
• Economist Martin North said coronavirus could spark new GFC, hit house prices 
• Coronavirus symptoms: what are they and should you see a doctor?

A ban on Chinese tourists visiting Australia could plunge the economy into a recession for the first time in three decades.

A veteran economist also fears a global coronavirus pandemic could spark a new global financial crisis, which could potentially unleash a 40 per cent plummet in Australian house prices. 

Prime Minister Scott Morrison has today extended by another week a travel ban on holidaymakers who have transited through China - Australia's biggest source of international tourists.

With the summer bushfires and weak retail sales already undermining the economy, Digital Finance Analytics principal Martin North, an economist, said he feared the coronavirus could plunge Australia into recession this year for the first time since 1991.

'Chinese tourism, very critical: definitely gone off the boil and my owns sense is that it's probably going to hit people hard,' he told Daily Mail Australia on Friday.

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'The unknown, of course, is how long this is going to go on for.

'Before coronavirus, we were going to be in some difficulty: this is just another weight on the camel's back.'

One Nation leader Pauline Hanson wants the border closed with 21 Australians so far testing positive to the coronavirus, including six in China and Japan.

The respiratory disease with no cure has killed more than 1,300 people in China and it's expected to get worse, with Hong Kong epidemiologist Professor Gabrielle Leung fearing it could infect 60 per cent of the world's population if left unchecked.

Before the onset of the deadly flu-like illness, China was Australia's biggest source of international tourists with 1.458million visiting in the year to November, Australian Bureau of Statistics data showed.

China, Australia's biggest trading partner, is also the No.1 source of international students, who contribute $12billion a year to the economy.

They made up 38.3 per cent of foreign education enrollments in 2018, with Department of Education figures showing 152,591 were studying in Australia. 

The summer bushfire crisis had ravaged the New South Wales South Coast and Victoria's East Gippsland region in late January when the Chinese authorities confirmed the first cases of coronavirus in Wuhan.

In another ominous sign, the Australian Banking Association feared the coronavirus could hurt small businesses.

Its chief executive Anna Bligh, a former Queensland Labor premier, urged struggling business borrowers to ask their bank to allow them to refinance or defer their loan repayments.

'Thousands of businesses have had a horror start to the year with drought, bushfires and floods,' she said today.

'Now the coronavirus having a severe impact on both their ability to create products and also export them to markets overseas.

'Banks have hardship teams in place to walk businesses through the assistance on offer if they have been impacted by events outside of their control.'

Mr North said the coronavirus announcement from Australia's banking lobby group was a sign the economy was in danger of sinking into a technical recession, as spending from China dried up.

'That's a sign that this is already starting to hit,' he said. 

'I personally think that the tourism and the education dollar is going to have a very significant impact on the economy here unless things turn around.'

The coronavirus is expected to hit the global economy in 2020 than the SARS outbreak did in 2003.

In a worst-case scenario, Mr North feared it could spark a new global financial crisis, which would be worse than the American sub-prime mortgage crisis a decade ago. 

'The coronavirus could be a big, external shock so essentially, if that goes really badly then it could be the sort of trigger that would create a GFC Mark II,' he said.

'I don't think Australia would be immune partly because we're so leveraged from a banking perspective.'

With household debt to income levels close to a record high, this in turn, could spark a 40 per cent slide in Australian house prices.

'This is still looking pretty shaky,' Mr North said.

'We've always got that risk of properties reverting to that 40 per cent drop.'