No clear winner in New Zealand election as two major parties head for coalition talks

There was no clear winner following New Zealand's general election on Saturday, as the leaders of its two major parties prepared for negotiations to form a coalition government.

Preliminary results showed Prime Minister Christopher Luxon's centre-right National Party won 42 seats but was 19 short of the simple majority needed to form a government, despite being the largest party.

Combined with their coalition partners ACT and New Zealand First, they would have a slim lead over the left-leaning bloc if a deal could be reached.

But opposition leader Chris Hipkins, whose Labour Party won 36 seats, showed no signs of conceding, saying the shape of the next government will remain uncertain for a while.

The tight result followed a campaign shaped by the cost of living and unemployment. The electoral commission was not due to announce the official result until 27 November.

Luxon addressed supporters in Auckland as votes were being counted. He congratulated Hipkins on a very hard-fought race before addressing party colleagues, saying that whatever the final count, they were incredibly proud of each and every one of them.

Hipkins said the people have spoken, adding that it may take a bit longer to work out what they have said. He said the results made clear the next parliament is going to require all of them to compromise, to work together and to find a common ground.

More than 99% of votes have been counted, with National and Labour neck-and-neck in terms of vote share. But the preliminary results pointed to historically low support for the two major parties, with a combined vote share of around 60%.

They were followed by the Greens, ACT, New Zealand First, the centrist Opportunity Party and Te Pati Maori, which represents Maori interests.

The Opportunity Party crossed the 5% threshold to enter parliament for the first time. Its leader, Qiulae Wong, said the party would work with either side. It has been described as this election's kingmaker as it remains open to working with either major bloc, but its leaders said they would negotiate first with the party that secures the most seats.

Speaking at Opportunity's watch party, Wong told supporters that they believe they can change the way politics is done to focus on the future, on the next generation, and on finding common ground.

Professor Andrew Geddis from the University of Otago, an expert in election law, said the Opportunity Party as a wildcard player could determine which bloc of parties is able to govern. He said it will come down to some very fine vote margins not just between the parties, but in individual electorates. Special votes will have to be processed and counted over the next three weeks. Special votes are votes cast outside a voter's electorate, including overseas.

The Greens, who have proposed forcing the country's two main supermarkets to divest stores to create publicly-owned shops, saw their vote rise by a couple of percentage points.

Julian McCrann, head of polling at Roy Morgan, told BBC News the cost of living was the main issue for many New Zealanders. He said that three years ago, Luxon came in saying he would be making New Zealanders' lives better and solving these economic issues, but he has not really delivered.

New Zealand's mixed-member proportional voting system means most governments are coalitions. Each voter makes two choices, for the representative of their constituency in parliament and a political party.