Homelessness is increasing in hotspots where rents are sharply on the rise, prompting calls for increased funding for support services and more public housing.
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Half the people seeking help for homelessness in NSW are not receiving it due to underfunded services, the head of a peak agency for the support sector has warned.
"NSW's housing crisis is putting huge pressure on frontline homelessness services, with many struggling to keep up with rising demand," Homelessness NSW chief executive Dom Rowe said.
Housing was becoming increasingly unaffordable across the state, driving increasing homelessness in metropolitan Sydney as well as suburban and rural areas, he said.
Mr Rowe wants increased funding for homelessness services, calling for the state to match a 20 per cent increase recently announced in Queensland.
The peak body for NSW social services, NCOSS, has also reported more people were looking for help.
"Our members are also seeing new clients they previously have not seen before, including people working multiple jobs but still struggling to get by," chief executive Cara Varian said.
Housing and Homelessness Minister Rose Jackson said the situation needed to change.
"People with safe and secure jobs but not safe and secure housing are increasingly needing homelessness support," she said.
Ms Jackson said contracts had been extended for service providers to strengthen support for priority applicants, such as women and children fleeing domestic violence, as part of a $224 million package in the last state budget.
The state government was also working to speed up the delivery of new homes through planning reforms and by working with other levels of government, she said.
"We know there is only one way we will address the housing crisis in NSW and that's through the creation of more housing," Ms Jackson said.
The largest increase in the number of people receiving help from specialist homelessness support services was in Sydney's inner-west council area.
An extra 245 people needed help in the region in 2022/23, compared with the previous year, according to Homelessness NSW analysis based on Australian Institute of Health and Welfare data.
The median rent there was $679 in September 2023, $99 more than in September 2022, according to figures from the NSW Department of Communities and Justice.
There was an increase of 186 people accessing support services in Canterbury-Bankstown, where median rents climbed $130 to $600 per week.
In Walgett in northern NSW, median rents increased 40 per cent to $280 a week, while support service client numbers rose nearly 50 per cent.
Housing campaign group Everybody's Home called on the Commonwealth to expand eligibility for rent assistance to alleviate financial stress on households.
It also called for increased funding for homelessness services to meet a projected growth in demand in a pre-budget submission released on Tuesday.
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