Cash buyers are king - as 60pc of purchasers don't need a mortgage
Cash buyers are dominating the housing market, with new figures showing that the proportion of such buyers has shot up - they now account for six out of 10 house and apartment purchases.
Experts said that this indicated a highly dysfunctional market, something the Government is hoping its new housing and homeless strategy will address.
The number of cash buyers has remained consistent since the crash, but there has been a big drop-off in the number of mortgage buyers, as they have been squeezed from 2008, since the bubble burst in the housing market.
This means the proportion of cash buyers has shot up to 60pc of purchases in 2014, the new figures from Central Bank economists show.
During the housing boom, just 25pc of purchasers were able to buy without a mortgage. But now the wealthy and institutional investors are dominating the residential property market.
The high proportion of cash buyers is also due to difficulties that ordinary home buyers have in getting approval for mortgages due to banks tightening lending, job losses, pay cuts and Central Bank lending restrictions.
The strong position of cash buying is also attributed to high numbers of speculators buying so-called distressed property assets, properties where the borrowers have defaulted on the loan.
Commenters have also pointed out that the 'bank of mum and dad' plays a big role, where wealthy parents are financing the purchasing of homes for their children.
An academic paper from three Central Bank economists shows there has been a sharp fall in the numbers getting mortgages since the crash.
During the boom, only one-quarter of purchasers were able to buy without a mortgage.
The number of transactions has fallen markedly in recent years, from a peak of 150,000. Purchases fell to a low of just 21,000 in 2010.
Since that year, the overall number of cash transactions has not increased much, the academic paper found.
The fact that the overall number of such transactions has remained relatively steady means that the share of transactions made up by cash buyers has risen sharply. At the same time there has been a dramatic fall in mortgage draw-downs since the financial crisis.
Central Bank economist Dermot Coates said the proportion of the market now accounted for by cash buyers was neither sustainable nor "likely to continue into the future".
He added that a pick-up in construction combined with a rise in mortgage lending would see cash transactions as a proportion of the overall market fall back to more normal levels.
The report states: "Whilst it is true that cash sales have been a feature of this market for many years, in more recent times we have seen a greater role being played by institutional and international investors including acquisitions by speculative international asset management groups."
John McCartney, the director of research at estate agency Savills, said the lack of construction and lending limits meant that fewer people were obtaining a mortgage.
He said the level of overall transactions had fallen from 150,000 in 2006 to just 49,000 last year.