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Capital flow in New Zealand's rural sector

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Capital flow is always a fundamental factor in the property market and the rural sector is no exception.

There are two key financial drivers affecting the rural market at present, says Ruth Hodges, National Co-Director of Rural and Agribusiness at Colliers International. 

“Ongoing tightening of the restrictions on overseas buyers continues to constrain the flow of capital coming in from offshore.

“Adding to this, is the climate for finance with bank lending on most rural and agriculture sectors also restrained as banks seek to re-capitalise their books.”

Andrew Laming, Director of NZAB says that the latest RBNZ data for the quarter ending 31 March 2020 sheds some light on the finance climate in the rural sector.

“Banks’ appetite for lending can be driven by this data, both proactively and re-actively so it provides useful insight into both what they are currently doing and their intentions.

“Overall, rural and agribusiness debt went down by over $1 billion in the last six months. This shows incredibly strong discipline from farming businesses, which is a trend we started to see at the beginning of 2019.

According to the RBNZ, total loans across all sectors of consumer, home, business, commercial and agribusiness, grew by $11 billion over the same period.

Laming says this shows the agricultural sector is doing the heavy lifting when it comes to paying back debt in New Zealand.

“The market share of rural and agribusiness loans has stayed relatively constant between the banks with ANZ still holding the largest share.

“The biggest changes were ASB, which moved into fourth place behind Rabobank, and BNZ, both shedding up to $550 million in rural and agribusiness loans each over the last six months.

“Rabobank and Westpac continue to be the big growers, but of late, we’ve seen ASB increasing their market presence significantly.

“The amount of rural and agribusiness loans that a bank has as a percentage of their total loans can be an interesting indicator of its lending appetite.

“A good example is that while ANZ has the largest market share of rural and agribusiness loans, with the amount of loans on their books as a percent of their total loans is on par with the market average. 

“When looking at non-performing loans, there was little change in the last six months, apart from ASB with a significant change downwards.

Laming says a decrease in rural and agribusiness non-performing loans overall is both positive and negative for the sector.

"It is good that the debt is being repaid but it shows lower reinvestment into the sector."

Richard Kirke, International Director of Capital Markets for Colliers International says the inability and reluctance of banks to lend into the agricultural sector has broadened in the first two quarters of 2020 to include virtually all non-residential sectors.

This has created significant opportunity for non-bank lenders to enter the market.

Chelsea Herbert, Head of Colliers’ Debt Advisory service has been witness to this market change.

“Since I joined Colliers in the middle of quarter one 2020 it has been interesting to note that over half the loans I have facilitated have been to non-bank lenders, a combination of high net worth privates, domestic and international institutional funds.”

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Ruth Hodges



Ruth commenced her career in rural real estate in August 2009 before establishing the first Colliers Rural and Agribusiness franchise in New Zealand with Shane O’Brien in September 2014. Her experience and acumen led to a role operating at a national level, spearheading growth in Colliers’ Rural business between 2018 and 2021.

Now based in the Southern-Lakes district, Ruth is Managing Director of the Otago and Southland Rural business, of which she was one of the co-founders in January 2019.

Growing up on a large-scale, high-country farm in Central Otago set the foundation for Ruth’s involvement in the rural industry throughout her working life. After achieving a first-class honours degree from Otago University, Ruth commenced a career in rural finance that spanned nine years with the National Bank. She then joined the progressive new dairy company, Synlait, as Business Development Manager, focusing on growing their farming assets via key acquisitions around the Canterbury region.

Ruth is also involved in the rural building industry with her husband Nigel, and the experience of the incredible highs and lows that this industry has encountered over the past 13 years has honed her management and problem-solving skills to the highest level.

As a rural real estate professional, Ruth's strategy is based around the cornerstones of people and their farming businesses.  Focussing on these rather than solely the physical assets is key to how she achieves positive outcomes regardless of market conditions. Her underlying principles of trust and integrity ensure she continues to form long-lasting, genuine relationships and she applies an open, honest approach to all situations.

Furthermore, Ruth's comprehensive understanding of an often complex and evolving rural market together with her ever-present proactive attitude allow her to provide solutions that go beyond the traditional real estate model.

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Richard Kirke

Director | Capital Markets


Richard is responsible for the promotion of New Zealand property to international investors, leveraging of his relationships developed in executive positions during his near 8 years in Hong Kong, as well as assisting to grow the company’s nationwide Rural and Agribusiness agency capability.

Richard began his real estate career in 2004 with CBRE, in the five years he spent with them (before leaving to run Colliers Hong Kong business in 2008) he was involved in many notable transactions including the sale of the Lion Nathan site in Newmarket for $162m, the sale of the GE & BNZ Britomart properties on behalf of Manson’s to the German fund HIH and portfolio sales, including the successful auctioning of 16 National Bank Branches across New Zealand.

During his time as MD of Colliers Hong Kong he was involved in the sale of 50 Connaught Road on behalf Apollo Group (a New York based Hedge Fund) to the Agricultural Bank of China for $US632m.

Richard was the Managing Director of Colliers Hong Kong office for six years from 2009-2014. During this time he was an active participant in several high value transactions and developed broad relationships with both Asian investors and colleagues across the region.

In late 2014, Richard agreed to run CBRE’s Asia Pacific Capital Market business, including their Capital Advisory (Real Estate Investment Banking) business, this further added to his knowledge of real estate investors, particularly in greater Asia.

As a senior executive of Colliers for 6 years in Hong Kong, Richard has strong personal relationships with Colliers personnel across the globe.

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