Homelessness services across Victoria are struggling to keep up with rising demand as providers warn they are at full capacity, and in some cases, turning people away.
A woman sleeps beside belongings in Melbourne's CBD as cost-of-living pressures drive demand. Photo: Holly Grimmer
Service organisations say cost-of-living pressures are driving more Victorians to seek assistance in 2026, with an increase in people dealing with housing loss for the first time.
Warren Elliot, external communications manager for the Salvation Army in Victoria, said demand for support had been steadily increasing over the past two years.
“There’s definitely an increase in demand … that’s just been going on sort of constantly,” he said, adding that financial pressures were forcing more people to choose between necessities in order to keep a roof over their heads.
“It’s a vicious circle of what things can I afford to pay for this week … maybe I’m not going to be able to eat this week, or I’m going to pay my rent, or I’m not going to be able to get my medications”, he said.
He added that intervention was critical, with services increasingly focused on preventing people from becoming homeless by helping them stay in their existing accommodation.
At Melbourne City Mission’s (MCM) Frontyard Youth Services, demand has also surged, particularly among young people seeking crisis support.
Anna Paris, head of youth homelessness services with MCM, said the service had recorded a 23.7 per cent increase in young people accessing support over the past three months.
“We haven’t been able to keep up with the demand we’re seeing,” she said.
Paris added there had also been a noticeable rise in young clients, particularly 17-year-olds seeking support.
She linked the trend to mounting financial pressure on families, which can contribute to conflict and housing instability for young people.
“We do know that there’s been an increase in the number of young people who have come to us saying they’re homeless because of financial pressures … it is definitely a link to the cost-of-living increases that we’ve seen with families who are already struggling,” she said.
The surge in demand has had direct consequences, with some services no longer able to provide immediate accommodation.
Paris said Frontyard had exhausted its funding for crisis accommodation, forcing staff to turn some young people away.
“We’ve had to turn young people away and not been able to assist them to get them into crisis accommodation because of the fact that the funding doesn’t meet demand,” she said.
Similarly, the Salvation Army says limited resources are constraining the level of support it can offer, with funding needing to be spread more thinly across a growing number of clients.
“In the past we might have been able to say ‘yes, we’ll meet your rental arrears and pay to put you a week in front so you don’t get in this situation again’, but we probably can’t do that now … we can’t always meet all of people’s needs,” Elliot said.
Paris and Elliot agree that an increase in funding and the number of workers on the ground could really make a difference.
Without these necessary developments, Paris warns that the number of young people experiencing homelessness will continue to increase, and with that, the potential for accumulated trauma.
“The impact of being homeless can have a massive impact on young people’s mental health and wellbeing,” she said.
In response to rising demand, the Victorian Government pledged in the 2025-26 State Budget to invest an extra $61 million to help people experiencing homelessness secure permanent housing. The next budget is scheduled for May, but service providers say urgent support is needed now to prevent more Victorians, especially young people, from losing their homes.
