Moderate Liberals have suffered major early swings in damaging signs for the faction, while some of the party's ministers face losing seats to independents.
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Liberals at the party's function in Sydney are acknowledging defeat, with the path to government being widely touted as near impossible.
Government ministers and Liberal MPs remained noticeably absent as the clock passed 10pm.
Some 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.
In the Melbourne seat of Goldstein, independent Zoe Daniel claimed victory over Liberal incumbent Tim Wilson.
In North Sydney, moderate Liberal Trent Zimmerman is facing a 14 per cent swing against him.
In Sydney, Fiona Martin in Reid and Jason Falinski in Mackellar, plus Katie Allen in Melbourne's Higgins have all had their seats called against them by the ABC, while Treasurer Josh Frydenberg also trails an independent.
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."
Housing Minister Michael Sukkar has also suffered an almost four per cent swing against him in his Melbourne-based seat of Deakin but is now tipped to narrowly hold the seat.
Finance Minister Simon Birmingham says the seats the Liberals trail in outline a problem for the party, including in inner-city electorates like Kooyong, Higgins, Mackellar and Goldstein.
"It's a clear problem that we are losing seats that are heartland seats, that have defined the Liberal Party for generations," he told the ABC.
"We need to heed the message because forming government in the future without winning those sorts of seats is a next-to-impossible task."
Senator Birmingham said comments such as those by Warringah candidate Katherine Deves about transgender athletes harmed moderate MPs in neighbouring electorates.
"They are being punished by association with candidates in adjacent seats," he said.
Australian Associated Press
