The Coalition looked like getting at least 89 seats in the 150-seat lower house.
Labor is expected to hold 56 seats, with the Greens retaining Melbourne, Bob Katter holding his Queensland seat of Kennedy and Tasmanian MP Andrew Wilkie keeping Denison.
However, 27 seats remained "close" as the Australian Electoral Commission continued counting and two were too difficult to call at all.
In Tasmania, Labor suffered a blowout of more than 10 points and is likely to hold only one of its four seats in the state.
"It reflects a lot of unhappiness with the state Labor government and also unhappiness with the federal Labor Party," Mr Wilkie said.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Victoria and South Australia also swung hard against Labor.
The five point move from Labor to the coalition in Victoria wipes out all the gains the party made in the 2010 election.
"There was the hometown girl factor with Julia Gillard - that's clearly not there now," Liberal senator Mitch Fifield said.
The Queensland swing was contained to just 1.35 points although Labor's first preference vote was down in line with the national swing. In his concession speech, Labor leader Kevin Rudd said he was proud that despite the "prophets of doom" the party seemed to have held all its seats in the Sunshine state.
However, the races in Labor-held Capricornia and Petrie are still in play with just a few hundred votes separating the Labor and LNP candidates.
One of the big surprises is the strong showing of the Palmer United Party, which pulled in more than 11 per cent of primary votes in Queensland and 5.6 per cent nationally. Leader Clive Palmer could wind up taking the seat of Fairfax from the coalition.
Concerted campaigning in western Sydney appears to have paid off for Labor, with the NSW statewide swing against it down to a little over three per cent. And in Greenway Michelle Rowland bucked the trend with a three point swing towards her, dashing the hopes of her hapless Liberal opponent Jaymes Diaz.
In Western Australia, with about two-thirds of the vote counted, the coalition had increased its vote by 2.4 points.
But Labor is set to hold its three seats in the west and both minister Gary Gray and former state minister Alannah MacTiernan won small swings towards them. The Greens vote dropped across the country.
The minor party picked up about eight per cent of the primary vote in both lower house and Senate races.
This was a drop of about three points in House of Representatives electorates and 4.4 points in the Senate.
