Australian dwellings produced a resonable result for the year ending December 2013, indicating that the correction phase in the market is nearing an end and growth is finally appearing.While we are seeing growth nationally, the market is not growing uniformly. Melbourne and Sydney are the performers while Canberra, Hobart, Adelaide and Darwin have not produced growth equal to or better than the national average.Interestingly, the cities that have shown the best growth (Sydney and Melbourne) are also the most unaffordable. It is very difficult for the median family in Sydney and Melbourne to support a family on the income remaining after home loan repayments. This would suggest that First Home Buyer activity should be under represented in these markets, which is in fact the case. First Home Buyers have been reducing for some time now in NSW.First Home Buyers have largely been replaced by investors. The percentage of First Home Buyers in the market currently is probably the lowest I've seen in my last 10 years of lending.Sydney and Melbourne are becoming renters markets where individual investors (local and international) and superannuation fund investors are the owners of residential property. Latest stats on investor activity by the ABS confirms the growing activity of these two groups. National lending to investors was up by 1.5% in November from October, and up 21% for the year ending November 2013.Investor activity in NSW is even stronger, with data to October showing a rise of 25% over the last six months and a significant 45% increase over the last 12 months. This is a feature of a maturing market and if you look at mature markets around the world, particularly in Europe, you can see that renting is more the norm than ownership.Currently, housing provides low levels of risk and reasonably good returns for investors. Future interest rate increases will likely have minimal impact on investors due to tax benefits of gearing. This would suggest that substantial rent increases are likely.So it would be logical to expect continued property and rental growth in Sydney this year. Sydney property prices are expected to grow at a rate a little lower than last year – probably around 7-9%.