Morrison steps down after conceding defeat

"To my colleagues who have had to deal with very difficult news, and have lost their seats tonight, I as leader take responsibility for the wins and the losses," he told supporters at Liberal headquarters in Sydney.

"That is the burden and that is the responsibility of leadership."

Mr Morrison said he would continue to represent the people of Cook and serve them to the best of his capability.

"But tonight, it's a night of disappointment for the Liberals and Nationals, but it's also a time for coalition and members and supporters all across the country to hold their highs head," he said.

"We have been a strong government, we have been a good government, Australia is stronger as a result of our effort over these last three years."

Mr Morrison lauded the Australian people for coming through a tumultuous few years as he addressed the party faithful.

"What Australians have endured over these past few years has shown a tremendous depth of character and resilience and strength and each and every day I have had the great privilege to lead this nation," he said.

"On a night like tonight, it is proper to acknowledge the functioning of our democracy. I've always believed in Australians and their judgment and I've always been prepared to accept their verdicts."

It comes after moderate Liberals have suffered major swings in damaging signs for the faction, while some of the party's ministers face losing seats to independents.

Some Liberal supporters have lamented an unpopular prime minister with no large policy targets and antagonistic policies, such as on a federal anti-corruption commission, which cost inner-city votes but had no bearing on outer-suburban seats.

Defence Minister Peter Dutton, who is set to retain his Brisbane-based seat of Dickson, says the nation and the party face many challenges ahead.

"We have, as a Liberal family, suffered a terrible day today. There are some amazing people who supported the Liberal Party day in, day out. Through good times and bad," he said.

"They are hurting tonight. I want to acknowledge them. I want to acknowledge the work of the prime minister and Josh Frydenberg."

Outgoing treasurer Mr Frydenberg remains behind challenger Monique Ryan with a more than nine per cent swing against him and is projected to lose the seat by a three per cent margin, based on progressive tallies.

Addressing his supporters in Kooyong, Mr Frydenberg refused to concede the seat and acknowledged that while difficult, victory was not impossible.

"While it's mathematically possible that we win in Kooyong, it's definitely difficult," he said.

"In what looks to have been my last press conference as treasurer - an unemployment rate at 3.9 per cent, the lowest in nearly 50 years. 

"So for me to know that our economy is stronger today than when we came to government, that more people are in work today than when we came to government ... is something that I am eternally proud of that our government has achieved."