In construction management, it is crucial to grasp the profound influence of cognitive biases on decision-making processes within the New Zealand construction sector. While there is a common belief that the basic principles of construction practices are “well-known,” there is still a misunderstanding about the necessary processes and critical elements for successful project implementation. Cognitive biases, intrinsic to human decision-making, significantly affect decisions within the construction industry. This study delved into the cognitive environment of the New Zealand construction industry. It used a qualitative analysis approach, employing narrative and theoretical analysis to examine the data. A systematic literature review following PRISMA guidelines found 33 relevant journal articles from various databases. The co-occurrence of the keywords used in the systematic literature review was presented using a VOSViewer image that highlighted the most relevant keywords. The review identified 67 cognitive biases in both construction and non-construction industries. Then, the following interview of five industry professionals in New Zealand confirmed 16 of the biases and identified three more. Additionally, the study revealed seven interrelationship loops among these biases, which were visualised using Vensim software. The study concluded that the five critical cognitive biases affecting decision-making in the New Zealand construction industry are confirmation bias, status quo bias, overconfidence, framing effect, and anchoring bias.