No US Style Crash in China Home Market: JPMorgan
China's property sector is not headed for a U.S. style crash given strong demand and low leverage in the sector, said Fang Fang, chief executive officer for China investment banking at JPMorgan Chase.
Fang Fang, who is also part of the Chinese People's Political Consultative Conference - a political advisory body, told CNBC on Thursday: "The market has reacted negatively over the past few days [to the recent cooling measures] but people still believe there is solid demand for properties, particularly in the big cities, so the impact may be temporary."
The Chinese government announced last Friday measures to curb speculative demand and stabilize prices. It called for stricter enforcement of a 20 percent capital gains tax on home sale profits and asked cities with fast property price increases to raise the down payment requirement and mortgage rates on second homes.
The curbs prompted panic over the re-emergence of a bubble in China's property market leading to a steep fall in property stocks.
However, Fang ruled out the risk of a home market crash, similar to the one seen in the U.S. in 2008, on two accounts. First, demand for homes is strong among different income levels in China and second there is limited access to bank loans.
(Read More: Where China's Property Market Is Getting Scary)
"People want to move to bigger units as their disposable income grows. We continue to see solid, growing demand across high, mid and low income families... Overall, the government is concerned about the continued rise in property prices but it is mainly driven by strong demand rather than bank lending support," Fang said.
"The leverage for the whole property sector in China is modest, you can't get too much bank leverage for your property purchase, which is different to what you saw in the U.S.," he added.
Property prices in some Chinese cities have increased 10-fold in recent times, prompting the government to crackdown on the sector via curbing bank loans. Second home buyers, for example, are charged a higher mortgage rate.