The listing said the applicant would live with three fulltime professionals near a New World supermarket and just 30 seconds away from a Remarkables bus stop.
However, the new flatmate would have to share a bed with a "clean" man who is "always busy with his work".
One woman who inquired about the room asked if the tenant would get the room to themselves.
When the man who listed the advertisement said no, the woman responded with, "Yikes!"
Another woman shared the post on a Queenstown Facebook group and said, "For the low price of $195, you can sleep next to a [clean] man every night."
"Personally, I’d rather s*** in my hands and clap, but get in quick team, it’s rough out there."
Kate Robison also shared the post because she thought it was creepy. "Why not get rid of the double bed and put in two single beds?" she said.
Renters United president Geordie Rogers said the advertisement was shocking but probably not illegal.
"If it was being let out by another tenant and they were saying they were another flatmate, that would be legal. But if it was a situation where the landlord was requiring this to be the tenancy agreement, it would certainly be challengeable.
Rogers said sleeping in the same bed as another man was a safety issue.
"Your home should be safe, and that would be far less safe than having your own room."
Data from economists at Informetrics last year showed the average weekly rent in the Queenstown-Lakes District was $527 - compared with an average of $501 across the whole country.
This had resulted in residents taking drastic measures such as sleeping in cars and business owners housing their employees.
For almost a month last year, Jacob* lived out of his five-seater car while he tried to find long-term accommodation.
Rogers said these kinds of scenarios were becoming more common across the country.
"It’s more common that we are seeing rooms that wouldn’t traditionally be bedrooms being rented out as bedrooms," he said.
"What may have previously been used as a study space and may be slightly larger than a queen bed is now being rented out as a bedroom."
Queenstown Mayor Glyn Lewers said the council was working as fast as it could to help, adding it would have to "step up" to address the immediate need.
By David Williams