Homelessness crisis hits breaking point as services turn away desperate Australians

Women fleeing domestic violence are being asked whether they can sleep in their cars, while homelessness workers are handing out tents instead of accommodation as Australia’s housing crisis pushes frontline services towards collapse.

A damning new report prepared for the Albanese government reveals almost two-thirds of homelessness providers are turning away desperate Australians they would once have helped, with some rejecting as many people as they take in.

The findings expose a system so overwhelmed by soaring rents, chronic housing shortages and inadequate funding that it is increasingly unable to offer even emergency accommodation to people facing life on the streets.

The research, titled Breaking the Firestorm, by the University of NSW, found 91 per cent of frontline services had experienced increased demand over the past two years, while just 0.4 per cent reported a decline. Despite unprecedented pressure, official figures show just 3.9 per cent of clients who needed long-term housing received it in 2024-25.

The figures form part of the briefing from Homelessness Australia prepared ahead of the government’s Mid-Year Economic and Fiscal Outlook, warning that years of policy failure have created a crisis now feeding on itself.

One representative of the homelessness sector offered researchers a confronting account of what frontline workers were telling vulnerable Australians.

“We have nothing to do but give people tents and suggest somewhere sort of safe to camp,” the representative said. “Women leaving family violence are being asked, ‘do you have a lock on your car?’ And if you have a lock on your car, you’re considered to be safe.”

More than nine in 10 providers blame deteriorating rental affordability for the surge in demand, while 86 per cent say finding permanent accommodation has become harder in the past two years.

Homelessness Australia is demanding 34,000 new social homes annually, income support payments increased to at least $600 a week, substantially more federal funding for frontline services, and 20,000 permanent supportive housing places for people with serious mental illness and other complex needs.

That mirrors a similar call from the Australian Council of Social Service to lift payments such as JobSeeker, Youth Allowance and Parenting Payment to parity with the pension and pension supplement – at least $618 a week on current rates – and index payments to wages as well as prices.

Treasurer Jim Chalmers has conceded he is confronting a deteriorating fiscal outlook, with federal debt forecast to climb beyond $1.2 trillion by 2030 and cumulative budget deficits of $150.5 billion projected over five years. Rising global borrowing costs threaten to add billions more to the government’s interest bill, further restricting its capacity to respond to mounting demands for spending.

Homelessness Australia chief executive Kate Colvin said governments could no longer pretend the crisis could be addressed through minor changes to existing programs.

“There are now so many points of vulnerability in our housing and homelessness system that the cracks are starting to join. Small patch-ups just won’t do the job,” she said.

“MYEFO is an excellent opportunity to begin a robust response and pull the fraying threads of our housing and homelessness system back together.”

University of NSW researcher Andrew Clarke said the figures were the worst he had encountered.

“The system is under extreme pressure,” he said. “Homelessness support services are swimming upstream against an ever faster current.”

The briefing reveals 82 per cent of providers are finding it harder to secure even temporary accommodation, while 95 per cent agree social housing shortages are limiting their ability to help people escape homelessness.

A spokeswoman for Housing Minister Clare O’Neil said the government had invested $1.2 billion to support 50,000 vulnerable Australians, including more than 1000 new crisis and transitional accommodation places for women, children and young people fleeing domestic violence.

“Women tell us one of the main reasons they can’t leave a violent relationship is that they have nowhere safe and stable to go. That should never happen in a country like Australia,” she said. “We know there’s more work to do.”

But the government stopped short of committing additional funding to address the worsening crisis, saying future decisions would be made through the usual mid-year budget and budget processes.

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