Students in Wellington heading to university are among those struggling to find somewhere to live.
TradeMe's figures showed the capital had become the country's most expensive city for renters as costs soared by 5.8 per cent in the past year.
Students told RNZ the tight market was making flat hunting competitive.
Harry Simpson and his three friends applied for more than 50 flats with no success.
They've been on the lookout since November with a budget of $850 for a four-bedroom house but were yet to secure a flat close to Massey University's campus in Wellington.
At a recent viewing, he said one woman offered $50 more for weekly rent in order to secure a flat.
"We don't really have the means to be picky in terms of what we want or don't want, especially with how few flats there are. You don't really get the chance to be picky, you take what you can get."
According to Trade Me's figures, the median weekly rent in Wellington was at a record high of $565 a week, $15 more than in Auckland.
The pressure is real but there a few relief options for students.
President of the New Zealand Union of Students' Associations James Ranstead told Morning Report it was becoming "a lot more common now to see certain student flats over 24 or 48 hours to have 50, 60, 70 different pieces of interest from separate groups".
Price hikes varied depending on the landlords, he said. Some flats were staying the same, other flats were going up $10 to $40 per flatmate.
"The maximum one student can get on a student allowance is $230 per week... that's when their parents are on the lowest threshold income," Mr Ranstead said.
"So, when we are looking at student rents that are on average $210 in Wellington, that doesn't leave a lot ... you've got the course fees and living costs on top of that."
He said there was a mix in the quality of houses. While there was an increase in nicer houses, there were still dingy student flats out there in Te Aro Valley, Newtown and Brooklyn among others.
"There's so much pressure, students don't have a choice, they're taking up these flats when often they don't have great insulation and are damp."
He suggested students facing this reality get in touch with their students' associations who would be able to help with finding houses and hardship funds.
Trade Me head of rentals Aaron Clancy said listings were down by 7 per cent last month compared with December 2017. Meanwhile, the number of inquiries went up by 15 per cent, leading to big queues at open homes.
Mr Clancy said with growing demand for rental properties in the Wellington region, and tight supply, there would be more record-breaking rents to come.
"As house prices in the capital continue to rise, more Kiwis are having to stay in their rentals longer to save for a deposit and this is driving demand."