Nomads is the best hostel in Queenstown in my opinion (I also stayed in Base). It has a great location, right next to the lake, and has a very good quality : price ratio for New Zealand, which is an expensive country to visit. The hostel is super clean, the rooms are spacious, and they serve coffee in the morning - rare in this country. It's always bustling, and they offer dinner - small portions and dishes that change everyday. Get there early to ensure that you'll eat!
If you want to cook, they have a very well-equipped kitchen. There's a common room with several sofas and a fireplace, where people can often be found chatting or using the wifi (chargeable).