By Rebecca Howard 

WELLINGTON, New Zealand--Prime Minister John Key is set to lead New Zealand for a third consecutive term after his National Party won 48% of the vote in Saturday's election.

Official results show Mr. Key's party will likely end up with 61 seats in a 121-member Parliament. While the National Party may be able to govern alone with those numbers, Mr. Key said he stood ready to work with like-minded parties, and that he'd be talking to his current coalition parties over the next few days.

"People could see the country was headed in the right direction and they rewarded us," the former investment banker said in a televised interview Saturday night.

David Cunliffe, leader of the main opposition Labour Party, conceded defeat. The Labour Party picked up 25% of the overall vote, according to the Electoral Commission, while the Green Party, thought to be its likeliest coalition partner, won 10%.

"New Zealanders have chosen to continue and we respect that choice," Mr. Cunliffe told supporters. "Our opponents have built a formidable electoral machine."

The 53-year-old Mr. Key has helped steer New Zealand to a level of prosperity rarely found in developed countries since the global financial crisis, campaigning against a backdrop of the strongest economic growth in a decade.

The engine of its growth has been the nation's dairy industry, which is feeding large parts of Asia, and a construction boom fueled by rebuilding after a series of earthquakes in 2010 and 2011.

But the incoming government will face new challenges, with growth projected to fall sharply over the coming years as the rebuilding of Christchurch wraps up, prices for New Zealand's main commodity exports fall and monetary conditions tighten.

Mr. Key has promised business as usual and has said his government would balance the books this year after six years of deficits. "Three more years. This is a victory for those who kept the faith and refused to be distracted," Mr. Key told supporters.

Markets are likely to be cheered by Mr. Key's win when they open Monday. "It was a great victory for stability in New Zealand and markets like stability," said Auckland-based ASB's head of FX institutional sales, Tim Kelleher.

And Grant Williamson, a Christchurch-based broker for Hamilton Hindin Green, said: "The market is just going to love that result. It couldn't have been a better result. It removes all uncertainty."

John Key's victory was stronger than opinion polls were predicting. Meanwhile, Labour's weak showing was the worst in decades, prompting speculation of a possible change in leadership, though Mr. Cunliffe said he had no plans to resign. The Green party's support was little changed from 2011.

The country of 4.5 million people has a multiparty system that allows voters to choose both the party they want in government and the candidate for their local electorate. That means governments often rule with only the smallest of majorities. Governments under New Zealand's proportional-representation system, similar to Germany's, have always been coalitions.

It is unprecedented for any single party under the current electoral system to secure a majority of seats in Parliament, as Mr. Key's party appears to have done from votes counted Saturday. Still, there remain certain special votes to be counted by Oct. 4, though they wouldn't alter the overall result.

The scale of the win rules out the need for Mr. Key to do a deal with New Zealand First, an anti-immigration party that in opinion polls had at times looked likely to become kingmaker.

In government, Mr. Key fought off stiff opposition to the partial privatization of various state-owned assets, and, during the election campaign itself, allegations that his party covertly used a right-wing blog to smear opponents--accusations that cost the country's justice minister her job.

Mr. Key's support also held steady amid allegations by ex-U.S. intelligence employee Edward Snowden that the government had engaged in mass surveillance of its citizens, a charge the prime minister strongly denied. Internet Mana, a party funded by online entrepreneur Kim Dotcom, failed to win any seats.

Write to Rebecca Howard at rebecca.howard@wsj.com