Macdonald was seeking an early release to the Christchurch address of a relative who had been visiting him weekly.
He accepted many of the details of his psychologist report.
A calm, reserved Macdonald spoke in the hearing and apologised to his victims. Kylee Guy declined to comment after the decision was released.
Macdonald said he now felt sickened to look back on his crimes, which he said were driven by revenge and a desire to make himself feel better.
He claimed he was protecting the family and the farm by not owning up to his crimes.
With the help of a psychologist he had changed greatly over the last year, Macdonald told the hearing.
His last parole hearing had come shortly after the murder trial and he accepted he had not thought much about the crimes he had been convicted of, nor the impact they had had on his victims.
The board heard that Macdonald had been working in the community while serving his time at Rolleston Prison, helping to chop wood at a local golf course and clean up after recent severe wind damage in Canterbury.
Parole Board panel chairwoman, Justice Marion Frater, said Macdonald was a man "of some notoriety", and asked how he dealt with that.
Macdonald said he had worked alongside members of the public and had experienced no issues. A local employer had even offered him a job on a handshake deal, he said.
He had visited the proposed workplace on several occasions and had got to know his potential boss and future workmates, Macdonald said.
While inside, he had been keeping fit, and once granted his liberty would like to pursue exercising further, claiming it would be a good way to meet people.
Macdonald said he was no longer interested in hunting, and would give up his firearms licence if granted parole. Family members, including his parents, were there to support him today and gave oral submissions.
His lawyer Peter Coles told the board he had advised Macdonald not to apply for early release last year because he wasn't ready for it.
Macdonald identified areas of high risk - if he was released - would include contact with his ex-wife Anna and her partner, Brent Jameson, whom she is living with in Auckland. The couple are expecting their first child together.
Macdonald said his proposed release conditions of living in the South Island, living under a curfew and electronic monitoring, would have alleviated concerns for his victims and the wider public.
He also believed he would still be with his ex-wife Anna if he had not been convicted of the crimes.
They still got on well, he claimed. When he contacted their four children by phone or by Skype from prison, he and Anna would often chat about how the children were getting on at school or with their sports, he said.
After the 75 minute hearing and a short deliberation, Justice Frater told him that parole was refused.
Macdonald took the decision calmly, saying thank you before being led back into custody.
Former father-in-law Bryan Guy said the family was happy with the Parole Board's decision.
"That was our preferred option, that he serves a bit more time if not the full time. We're quite pleased."
Ideally, Macdonald would serve his full five-year sentence of imprisonment, Mr Guy said.
"I think we're often too lenient with parole in New Zealand."
Macdonald still has two years four months until his sentence end date of April 6, 2016.
He will be seen again by the parole board in one year.
