While there’s abundant negativity on the Australian housing market, activity levels look OK. Building approvals are at 205,000 vs peak 250,000 vs the long-term average 160,000 and importantly, unemployment is exceptionally low.

Here are the variables:

1. Banking Royal Commission – slowdown in lending.

2. Labor policy on capital gains and negative gearing.

3. Wet weather impact on housing-related stocks.

The key question for share price performance in this space is whether earnings revisions are likely to be positive or negative over the next 12 to 18 months.

To find out what stocks are impacted plus Julia Lee's tip, click here to take a free 21-day trial to the Switzer Report.