July 21, 2010 (Chinavestor) HSBC (NYSE:HBC) said China isn't likely to relax efforts aimed at preventing a real estate bubble anytime in the near future. Beijing has implemented three increases to bank reserve ratios this year and has introduced more stringent downpayment requirements for second- and third-time home buyers.
HSBC (NYSE:HBC) said hopes for adjustments to current property policy are "wishful thinking" by the market and that "policy makers are likely to keep the status quo for the next several months." The bank is forecasting 9% GDP growth for the world's third-largest economy this year.
The China Se Shang Property Index has fallen 26% this year has rebounded 4.1% since July 15, when China said GDP growth slowed in the second quarter, prompting speculation the restrictions may be relaxed, according to Bloomberg News.
HSBC (NYSE:HBC) said Beijing's policies have been effective at limiting asset prices and cooling economic growth, therefore inflation remains benign. The bank noted 9% GDP growth is ideal in the government's eyes.