There was a slightly calmer tone across markets heading into Monday trade, with investors appearing willing to pause for a moment after several weeks of heavy economic and geopolitical headlines. Gold remains one of the key assets being watched closely this week, still hovering around its 50-day moving average. Silver however may have already given the market a clue, breaking through its own 50MDA late last week and holding above it into the close.
For gold traders, this now becomes an interesting technical moment. Precious metals have spent weeks moving sideways underneath these averages, almost waiting for a reason to make a stronger move higher. If gold can finally push through convincingly this week, many analysts will likely see that as a sign that inflation concerns and broader economic uncertainty are still very much sitting underneath the surface.
Back home, the Reserve Bank’s latest rate rise already feels like old news for many Australians, with attention now rapidly shifting toward the upcoming Federal Budget. Cost of living pressure remains front and centre, but housing affordability is again dominating discussion as whispers grow louder around potential changes to negative gearing and broader property tax reform.
It’s a politically difficult conversation, but one that is increasingly unavoidable. A growing number of younger Australians are finding themselves permanently locked out of home ownership, while older generations continue to build wealth through multiple property holdings and long-standing tax advantages. Supporters of reform argue that housing should first and foremost be about shelter and stability, not simply a vehicle for aggressive tax minimisation and wealth accumulation.
Of course, there is another side to the debate. Many everyday Australians with one investment property also rely heavily on those arrangements as part of their retirement planning, particularly after decades of being encouraged into property ownership as a “safe” long-term strategy. Any meaningful reform therefore becomes a balancing act between improving affordability for younger buyers without financially punishing those who played by the existing rules.
Whether the government is genuinely preparing meaningful reform or simply testing public reaction ahead of budget week remains unclear. Either way, housing affordability is now becoming impossible for politicians to avoid.
Negative gearing is one of Australia’s most debated tax policies, particularly when housing affordability comes into focus. In simple terms, negative gearing occurs when the costs of owning an investment property are higher than the income the property generates. For example, if an investor receives $30,000 a year in rent, but spends $40,000 on mortgage interest, maintenance, rates and other costs, they are technically running the property at a $10,000 loss. Under Australia’s tax system, that loss can often be deducted against the investor’s other income, reducing the amount of tax they pay overall. Supporters of negative gearing argue that it encourages investment into the housing market, increases rental supply, and helps ordinary Australians build wealth over time. Critics however argue that it has also fuelled speculation, pushed up property prices, and given existing investors an advantage over first home buyers trying to enter the market. The debate becomes even more heated when combined with capital gains tax discounts, where investors can also receive reduced tax on profits made when eventually selling the property. That combination has helped shape Australia’s housing market for decades, and with affordability pressures now reaching historic levels, the conversation around whether negative gearing should remain untouched is once again moving back toward the centre of political debate.
