The Australian Institute of Health and Welfare (AIHW) has found specialist homelessness services receive an average of 353 requests for help every day that they can't meet.
Almost four in five of those in need are women and children, many fleeing family violence.
The lead up to Christmas is expected to be a busy period as need increases significantly, Mission Australia service provider Paul Royce told AAP.
"We see people at their most vulnerable and their greatest level of stress," Mr Royce said.
"It is distressing for staff when there are no real options available in terms of long-term housing, we will always work to provide short-term stays where possible but it's not a solution."
In the Northern Territory, where Mr Royce works, there is 12 times greater homelessness than the national average.
Almost 90 per cent of people seeking support would identify as being First Nations.
"People really want to stay on country and stay connected to culture but with overcrowding in remote communities, it makes it very difficult," Mr Royce said.
"We are seeing an increasing percentage of young people presenting to homelessness services alone who are already rough sleeping and couch surfing."
The AIHW data found children make up more than one quarter of all clients (27 per cent), and women and children together account for 73 per cent.
More people are turning up to services already homeless and rough sleeping has increased by more than 12 per cent, with one in five clients sleeping rough in the month before seeking help.
First Nations homelessness has also increased, with Indigenous clients growing six per cent to more than 82,891 and comprising more than a quarter of all people seeking help.
Service delivery must change when there is more demand but no additional resources to meet it, Homelessness Australia chief executive Kate Colvin said.
"If someone is at risk and reaches out, they are often able to avoid homelessness," she said.
"But what we can see coming out of the data is that people are not reaching services until they are already homeless, which puts more pressure on the whole system.
Homelessness Australia is calling for the establishment of a dedicated Homelessness Prevention Fund to stop people losing their homes and to ease the burden on crisis organisations stretched beyond limits.
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