Construction Loans

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The Wall Street Journal reports Chinese regulators have ordered the nation’s big banks to put the brakes on loans to Dalian Wanda Group.
It is the giant property and entertainment company owned by billionaire Wang Jianlin.
Dalian Wanda is set the change the Sydney CBDs skyline with this <a href="https://www.urban.com.au/expert-insights/buying/69374-wanda-s-one-circular-quay-has-2020-completion-date" target="_blank">$1 billion dual-tower development</a> in the heart of Circular Quay by 2020.
The penthouse has <a href="https://www.urban.com.au/news/69333-chinese-developer-wanda-to-launch-1-billion-circular-quay-development" target="_blank">record-breaking $60 million</a> price hopes.
Chinese banking regulators met with executives at the country’s big state-owned lenders on June 20 and advised them that six of Wanda’s foreign acquisitions, including Hollywood producer Legendary Entertainment, were subject to government capital restrictions enacted last year, ­according to a document from one of the participating banks that was reviewed by The Wall Street ­Journal.
The document is likely to refer to Wanda’s deals dating back about five years in the US and ­Europe, according to a source.
The State Council, China’s cabinet, put in place rules restricting outbound Chinese investment in late November, in a bid to prevent money from leaving the country as accelerated outflows put enormous pressure on the Chinese yuan.
As part of the rules, Chinese companies are discouraged from making overseas deals related to real estate and entertainment.
Although most of the deals have already closed, the action would appear to block Wanda from getting new financing in connection with them from Chinese banks.
The document appears to shed light on Dalian Wanda’s surprise decision last week to sell most of its theme parks and hotels to developer Sunac China Holdings for $US9.28 billion ($12bn).
Wanda, controlled by billionaire Wang Jianlin, started as a property developer but moved into entertainment to diversify and expand its holdings. 
Wanda's biggest Queensland project currently is <a href="https://www.urban.com.au/expert-insights/buying/71843-wanda-s-gold-coast-jewel-tower-three-pre-launch-begins-with-more-than-120-interested-buyers" target="_blank">Tower Three in the Gold Coast</a>. The 108 luxury apartment tower has one, two and three bedroom apartments.
 
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Big banks ordered to put the brakes on loans to Dalian Wanda Group

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The non-bank lender Pepper Group has implemented mortgage rate rises on construction loans, due to higher funding costs.
Its advisory to mortgage brokers advised the higher construction loan rates came into effect July 6.
The increases ranged from 20 basis points to 55 basis points depending on the type of mortgage and the loan to value ratio (LVR).
Its essential construction loan - with an LVR of of between 80 per cent to 85 per cent - the interest rate rises from 4.59 per cent to 4.79 per cent.
<div>Pepper Group sits among the increased number of small financial services company to flag an out-of-cycle mortgage rate rise.The advisory memo to mortgage brokers, obtained by The Australian Financial Review, said the increases applied to new business. </div>
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