Prime Minister Scott Morrison has led the Coalition to a stunning election victory, securing a third term in government.
"I have always believed in miracles," Mr Morrison told the Liberal Party faithful late on Saturday night in Sydney.
There is still some uncertainty about the final make-up of the Parliament, but the Liberals and National Party look set to claim enough seats to form a majority government.
Bill Shorten earlier conceded defeat, announcing he will step down as party leader following the shock loss.
"I know you're all hurting and I am too," he told Labor faithful in Melbourne.
As the Liberal crowd chanted "ScoMo", the Liberal leader promised to get straight "back to work".
Despite trailing in the polls for months leading into the election, the Liberals and National party performed far better than predicted, while Labor failed to pick up seats it was targeting.
"Tonight is not about me or it's not about even the Liberal Party," Mr Morrison said.
"Tonight is about every single Australian who depends on their government to put them first."
But former foreign minister Julie Bishop said it was Mr Morrison's presidential-style campaign that had led to victory.
"If Scott Morrison pulls this off he will be forever immortalised in the history of the Liberal Party - he will be confirmed enduring fame if he is able to find that goat track back," she told the Nine Network.
"Actually, it's a single lane highway now."
As the polls closed on Australia's east coast on Saturday evening, Labor was optimistic of winning, but early results soon dashed their hopes.
The upbeat mood in the Labor Party function in Melbourne faded as the night went on with supporters becoming tense and then dejected.
Key to the Coalition's victory were gains in Herbert and Longman in Queensland and Braddon and Bass in Tasmania.
That's put the Liberal and National parties on track to win at least 73 seats combined, while Labor is assured just 61 with 13 still in play.
A handful of seats are still in doubt. Of those, Labor is ahead in Boothby and Cowan, the Liberals lead in Macquarie and Chisholm and independent Kerryn Phelps has an edge in Wentworth over the Liberals' Dave Sharma.
The crossbench is set to include independents Andrew Wilkie, Helen Haines and Ms Steggall, Katter's Australian Party leader Bob Katter, the Centre Alliance's Rebekha Sharkie and the Greens' Adam Bandt.
The Liberals benefited from a strong flow of preferences from Clive Palmer's United Australia Party and Pauline Hanson's One Nation, which together gained almost 6.5 per cent of the national primary vote.
Abbott loss
In one of the most hotly contested seats, former prime minister Tony Abbott lost to independent Zali Steggall.
Tony Abbott lines up to vote on election day.
AAP
Mr Abbott suffered a huge swing against him of almost 14 per cent, according to the Australian Electoral Commission.
In his concession speech, Mr Abbott focussed on the better-than-expected overall result for the Coalition.
"What's best for the country is not so much who wins or loses Warringah, but who forms, or does not form, a government in Canberra," Mr Abbott told his supporters.
"And tonight we can be extraordinarily confident, more confident than we ever had any right to expect, that we will have continued good Liberal-National government."
Labor frontbencher Brendan O'Connor said it had been a tough night and he was "disappointed for the Australian people".
He declined to say what would happen with Labor leader Bill Shorten, who had held the position for six years.
"There will be a lot of reflection for the Labor party in relation to policies and personnel, but that is something for another time," he told Nine.
Additional reporting by AAP
