Housing affordability continues to improve, with the HIA-Commonwealth Bank Housing Affordability Index recording the sixth consecutive quarterly improvement. The HIA-Commonwealth Bank Housing Affordability Index improved 1.1% (0.7 points) in the June 2012 quarter to be 10.6% (6.0 points) higher over the year.

The index is based on formula with three key components - incomes, prices and interest rates - and all three have been moving in the right direction recently for better affordability.

It's the latest in a series of positive outcomes that suggest an impending improvement in real estate markets around Australia.

Interest rates are down, unemployment is low while incomes have increased steadily, sales of new dwellings are rising and there are increasing signs of prices beginning to nudge upwards in the major cities.

The only ingredient missing is confidence.