The Australian Bureau of Statistics released data showing approvals for the construction of new homes rose 3.7% month-on-month in March. Economists had been expecting a 2% drop, so it certainly took many by surprise.

This does still however mean that building approvals were down year-on-year by 6.5%, but far less than the 7.2% decline that was seen in February. Hopefully this is a sign that things are improving, but worryingly this does now make it five consecutive months of year-on-year declines. I believe this is a fair indication of a cooling Australian housing market.

There are of course a number of shares on the Australian Stock Exchange which have exposure to the housing market and could see their earnings growth stifled in the future.

Three shares on the All Ordinaries (Index: ^AORD) (ASX: XAO) which I believe could be impacted from a slowdown in the Australian housing market are as follows:

Beacon Lighting Group Ltd (ASX: BLX)

Australia’s leading specialist retailer of lighting, ceiling fans and light globes has significant exposure to the housing market. If the construction of new homes sustains its year-on-year declines then it could cause Beacon Lighting’s earnings to slow. However, the company has had a great first half to its financial year, producing net profit growth of 22% over the same period last year. This goes some way to justifying the 22x earnings multiple the shares trade on, but does put them at risk of steep declines if it does experience a slowdown.

Brickworks Limited (ASX: BKW)

Brickworks is a leading building products manufacturer that I believe would undoubtedly suffer if there is a sustained downturn in the housing market. However, the company does have a long pipeline of work currently and it recently reported that price rises it implemented in its major markets were a success. I feel the short term outlook is quite positive, however long-term things may be a little mixed.

Nick Scali Limited (ASX: NCK)

This furniture retailer is another company which I believe would be negatively impacted from a slowdown in the housing market. After growing its earnings by 19% last year, the market now has high expectations for the company. Due to the shares being priced at a significant premium to its peers, I feel a drop in earnings growth could cause the share price to suffer a sudden and severe decline.

Foolish takeaway

Whilst I don’t believe it is time to necessarily close your positions and cash in your gains, it would be prudent to keep a close eye on the housing market and monitor for any further signs of weakness that could impact the long-term growth of these companies. In the mean time, there are a number of shares which I don’t believe will be impacted by this release today. I feel they could provide investors with great returns and are more than worth spending a few minutes of your time having a closer look at.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.