According to the latest figures from TradeMe the price of rent has shot up right across the country, with some students saying it's forcing them to share small spaces.
Just over 33 per cent of New Zealand households live in rental accommodation and the median rent is now at $460 a week.
The number of available rental homes has also dropped by almost half in almost a year.
Lucy Tindall told 1 NEWS she was told to move out when she asked if the landlords could do some work on her flat.
"The decision of the landlord is to go to Air BnB, which will give him higher profit margins."
Ms Tindall said the open homes are always packed out in Wellington, with some students in the city are being locked out as demand pushes up rent.
Marlon Drake said the rent increase is forcing students to share small rooms.
"We've got people living in their mate's living rooms. I’ve actually got someone who is coming to stay in my room because he can’t find somewhere to live over the summer break."
Mr Drake said landlords have been able to take advantage of the $50 increase from student allowances and have increased their rent by $50 a person.
However, landlords are arguing they are hard done by, too.
Property Investment Federations' Andrew King said there are more regulations and rentals are a less attractive investment with money being harder to borrow.
"At the moment rental property owners provide 85 per cent of all rentals in New Zealand, there's no way the government is going to be able to take up that slack."
Minister in Charge Phil Twyford said the rent increases are concerning.
"There is always the danger with a rent supplement, like the accommodation supplement.
"The long term solution is increased supply in the market, that's the only thing that will stabilise rents."
Mr Twyford said the Government will review the Residential Tenancies Act next year to give tenants more security.
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