Support for the two major parties was historically low. Together they took about 60% of the vote on the preliminary figures.
The count matters because neither large party can expect to govern alone. New Zealand's mixed-member proportional system means most governments are coalitions. Each voter makes two choices: one for a constituency representative and one for a political party.
The tight result followed a campaign shaped by the cost of living and unemployment. More than half the country no longer sees New Zealand as a land of opportunity, according to an annual social cohesion survey.
New Zealand's general election on Saturday produced no clear winner, as the leaders of the two major parties prepared to negotiate a coalition government.
Combined with their coalition partners, ACT and New Zealand First, they would hold a slim lead over the left-leaning bloc if a deal could be reached.
Preliminary results pointed to a highly divided parliament. Projections put the National Party on 42 seats and Labour on 36, and weeks of coalition talks could follow.
Hipkins said he would run a caretaker government until the final results were confirmed later in the month."With those final results there can then be meaningful negotiations,"he said. Final numbers still depend on special votes."We are going to have to wait for the special votes to be processed and counted over the next three weeks,"he said.