The election of 37-year-old Ms Ardern's Labour Party ended close to a decade of centre-right National rule and could spell big changes for the country's economy after most of the party's flagship policies survived the negotiations with New Zealand First leader Winston Peters.

Both parties have policies which are likely to lower immigration, implement higher taxes and weaken the housing market, UBS analyst Jeremy Kincaid said.

"The currency has already fallen on prospects of Reserve Bank of New Zealand reform and a slower growth profile, which also may feed into stronger price pressures," he added.

While the Kiwi dollar remained off more than 2 per cent against its Aussie counterpart at around 89?? in the wake of Thursday evening's announcement, the NZX initially fell sharply on Friday morning but then recovered through the trading day.

"The biggest surprise is the lack of surprise," Milford Asset Management's head of investment Brian Gaynor.

"It's been taken unbelievably calmly," Mr Gaynor said. "We thought that we would have a lot of clients calling us but we've only had two or three calls."

"Change isn't a bad thing. It's been quite modest," he said describing the move from centre right to centre left leadership as "more Tony Blair than Jeremy Corbyn."

According to Pie Funds Investment Management chief investment officer Mike Taylor, the market's reaction to the leadership change was a typical reaction to an incoming left-leaning government.

"Markets tend to favour conservative governments," Mr Taylor said.

Mr Taylor is waiting for more clarity on policy but highlighted the strong correlation between net migration and house prices in New Zealand.

The new leadership is likely "negative for the housing market which in turn could flow through to the rest of the economy," he said.

In terms of equity market impact, the one area of the market that was notably hit by the incoming leadership change was the retirement village sector, which relies on immigrant workers, Mr Gaynor said.

People also tend to move to retirement villages if they can sell their existing homes and there's now some uncertainty about the residential property markets, he said. The sector also doesn't have any exports so it is unable to benefit from a weaker currency.

Mr Gaynor said that overall the New Zealand equity market "has had a great run" but with the rate of economic growth now easing back "you tend to take a more cautious approach."

"We like Australia at the moment," he said, and Europe "looks pretty good" too.

To date the Kiwi equity market has been "very strong," Mr Taylor said, who also flagged he was looking elsewhere for investment opportunities. "The funds we manage have very few New Zealand assets," he said.

Morgan Stanley equity strategist Daniel Blake highlighted the high correlation of the New Zealand dollar to the domestic housing cycle and said "the currency could come under pressure should housing slow further."

"The policy agenda proposed by the next government's coalition of parties should have a negative impact on the structural outlook for the currency," he said,

In addition, Australian companies may not by immune from fallout from the leadership change, Mr Blake added.

"We recently noted that ASX exposures to New Zealand were larger than often realised, with 43 stocks generating meaningful group revenues across the Tasman," he said.

This includes the big four banks, which generate 10 to 20 per cent of group loans in New Zealand, with ANZ and NAB having the greatest share.

Consumer-linked businesses and industrials are next most exposed to any potential slowdown in New Zealand's economy, including Harvey Norman, Woolworths, Kathmandu, IAG, Downer EDI, Fletcher Building, and Fairfax Media, according to Mr Blake.