Twenty tenants, spread across nine nationalities, live in the three-storey, nine-bedroom property in the suburb of Fernhill.
Dunedin-based owner Perry Noyce has been criticised for the number of tenants.
But Mr Noyce said 40 people were living in what was a notorious ''party house'' when he bought it at auction in March.
He had halved the number and expected there to be about eight tenants remaining by the end of the ski season.
Mr Noyce said the gripe, and suggestions the house was infested with rats, came from the property's disgruntled former manager Sean Whittaker.
Six tenants at the house spoke to the Otago Daily Times yesterday.
They would not give their names but said they were happy with their living arrangements.
One British man said: ''If we weren't happy we wouldn't live here.
''There are rooms available elsewhere.
''We're one big dysfunctional family. None of us are here permanently and what do you expect for $120 a week?''The tenants said they had not seen any rats but there had been mice.
''We've seen more reporters than rats recently,'' he added.
Queenstown Lakes District Council building services manager Peter Laurenson confirmed the property was being run legally and there was no evidence of rats.
Mr Noyce was not required to live there to operate it as a boarding house.
Mr Noyce said: ''There were a few issues with the property manager. He wanted me to sponsor him for a work visa but I didn't think it met the criteria as a full-time job.
''That's what really this is all about. I moved in temporarily to get him out. He's gone.
''I called his bluff. Then comes this whole story there's squalor and rats - talk's cheap.''
Mr Noyce said three female tenants were chasing Mr Whittaker for their deposits, totalling $750.
Mr Whittaker has not responded to a request for comment.
Rent yield from the house was $2000 a week, including bills, firewood and some toiletries, Mr Noyce said.
Landlords are required to place bonds with the Tenancy Service, but Mr Noyce said this had not been done by the previous landlord.
He intended drawing up tenancy agreements and place new bonds with the Tenancy Service once numbers had reduced at the end of the season, and would also carry out some renovation.
A female tenant said: ''We don't want to move. Some of us have lived here a long time and we can't understand what all the fuss is about.
''There must be half a dozen houses like this in Queenstown. Why is this one getting all the attention?''
