For decades, farm debt in both countries tracked closely, expanding and plateauing at similar times. That is, until 2017, when New Zealand lending flattened and Australia’s took off.  

This is particularly surprising given that the main Australian lenders are the same as those in New Zealand. Most are wholly owned subsidiaries and Rabobank operates in both markets.

The most telling commentary on this appetite was from the Australian Executive Director of ABARES ( Australian Bureau of Agricultural and Resource Economics and Sciences), Dr Jared Greenville, who said that while the amount of debt had risen, the reasons point to ongoing investment in the sector.

“Farmers are taking on debt so they can invest back into their businesses.

“We’re particularly seeing more land purchases, showing that the farmers who are taking on higher debt are expanding their businesses.

“The risks of taking on this debt are more manageable as well. Rising land prices have provided farmers with more equity to support higher borrowings, while historically high farm incomes over the past few years in most agricultural industries supported farmers’ ability to service debt.”

New Zealand’s returns have been just as strong, especially in dairy. So why haven’t we seen the same growth?

Bank capital access and appetite are strong in Australia.

Australian banks and private credit providers have kept a strong appetite for Agri lending. Farmers there have used low interest rates (pre-2022) to scale up, invest in water security and upgrade infrastructure.

In contrast, New Zealand’s tighter regulations and conservative capital settings have diverted surplus cash into debt repayment rather than reinvestment.   After a couple of tougher dairy years in 2015/16, the RBNZ put a blow torch on the NZ banks and in some cases forced them to carry additional capital overlays, despite bank losses ending up being relatively negligible.  This as we know, had significant impacts on credit writing appetite (and in turn, competition) among all the main banks for the years that followed.

...Pushed along by the rise of private credit in Australian agribusiness.

Private credit is now a major player in Australian farm finance. As banks reach lending limits, non-bank lenders have stepped in. The broader private credit market exceeds A$200 billion, and a growing share is targeting agriculture. Firms like Merricks Capital manage over A$700 million in secured Agri loans, and providers like FarmCap offer tailored solutions to farmers.

This flexible capital is filling the gap left by tighter bank lending, but it has a drag along effect too:  Better funding = better performance = higher asset values = more capital attracted to the sector, including the banks.

And fueled by less restrictive foreign investment rules.

A key difference is foreign capital access. Australia remains relatively open to overseas investment in farmland, enabling large-scale, debt-backed acquisitions.

New Zealand by contrast, tightened its Overseas Investment Act in 2018, requiring overseas buyers to prove a “substantial and identifiable benefit to New Zealand”. This has slowed foreign investment and limited access to leveraged expansion capital.

There is a greater scale opportunity too.

You can’t ignore Australia’s Agri sector is simply bigger and more diverse. Vast tracts of land, often funded by debt have changed hands in recent years. Corporate ownership, institutional investment, and foreign capital have driven rapid growth, particularly in cropping and northern regions.

But that doesn’t mean New Zealand is “fully developed” and has no room to grow. Far from it.

Policy and sentiment in Australia appear much more pro-farmer.

New Zealand farmers face significant regulatory pressure from freshwater rules to emissions pricing—creating uncertainty around long-term investment. Meanwhile, Australian farmers benefit from government-backed water and drought support and lighter-touch regulation, which has helped keep confidence high.

Tax settings encourage investment.

Australia’s tax rules, like instant asset write-offs encourage borrowing and reinvestment. New Zealand’s simpler, more conservative tax system offers fewer incentives. While New Zealand has no capital gains tax, Australia does, but also provides generous exemptions for small and medium-sized agri businesses.

In short: A self-perpetuating investment class - that NZ used to have.

Australia’s growing agri debt reflects a system that supports investment, income growth, and asset appreciation—creating a cycle of confidence and reinvestment.

New Zealand’s tighter bank settings, regulatory burden, and lower capital competition have created a more cautious lending environment. This has led to less reinvestment, fewer capital gains, and weaker competitive pressure—holding the sector back.

The good news — we’re on the cusp of change.

New Zealand’s flat lining Agri debt isn’t all bad. It reflects caution and financial discipline. It also means we have an incredible springboard for growth in front of us  - as long as we have the confidence and capital to invest.

Growth, change of use, investment into new technology and succession planning are harder without access to new capital—especially if relying solely on traditional bank funding.

That’s where NZAB comes in. We help farmers tap into capital beyond the banks through private credit, equity partnerships and smart structuring.

Alongside the Main banks, we’re bringing in new capital from both New Zealand and offshore.

Global investors and debt providers are increasingly interested in New Zealand Agri lending once they understand the real risk profile. We’ve already completed many transactions with these providers across the capital spectrum.

More capital options mean better deals for farmers—driving investment, growth, and smoother succession.

Remember - Better funding = stronger performance = higher land values = more capital attracted to the sector.

Even the main banks benefit—forced to compete harder, lend more, innovate and back a stronger farming economy.

If your business has a growth plan, succession re-structure or refinancing need, talk to us. We can help position you for capital success in today’s evolving market.

Call one of our local team members in Southland, Canterbury, Manawatu, Taranaki or Waikato for an introductory chat (or flick us a quick email here)- they have decades of experience with sourcing bank debt, structuring and business strategy.  They been through all the ups and downs and we know what works, what doesn’t, and how to position you for success.

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