States and territories are being urged to step up on community and social housing.
House prices are surging, affordability is worsening, and dozens of people are turning up for rental inspections in cities and across regional Australia.
Critics say the budget did little to help the rising crisis, but the federal housing minister is shifting blame to the states.
"The states and territories will need to do more work to meet some of the needs," Michael Sukkar told the ABC on Thursday.
"We've got first home buyers at really elevated levels, which is good news."
Owner occupiers now make up three-quarters of the market, compared to just couple of years ago, when investors took the lion's share.
Mr Sukkar said jumping the deposit hurdle was the primary problem for getting people into home ownership.
A new family home guarantee will allow single parents to purchase a home with a two per cent deposit.
Mr Sukkar defended the government's credentials on affordable housing, saying more than $8 billion a year was being spent on rentals.
"Not one-off spending, $8 billion every year of recurrent spending, $5.5 billion towards Commonwealth rental assistance, which helps people in social and affordable housing, by giving them a payment towards their rent."
The National Housing Finance and Investment Corporation partners with community housing providers to build social and affordable housing in cities and country towns.
It raises money at lower rates from the bond market for not-for-profit community housing providers, which Mr Sukkar said had supported 6500 dwellings.
"We announced an additional $125 million to support state and territories in meeting those obligations and helping them increase their stock of social and affordable housing."
Australian Associated Press