The ACT turned away more than 1000 people in need of accommodation last year, with federal and territory funding for homelessness services falling over the last five years.
The Productivity Commission's latest Report on Government Services (RoGS) showed of the 3323 people who reached out for help with accommodation in 2016-17, nearly one-third (32.6 per cent) were turned away.
Only NSW and Victoria fared worse, with 37.2 per cent and 36.5 per cent of homeless clients turned away.
On average, 1.7 requests for accommodation services went unmet each day in the ACT in 2016-17. Those requests included calls for short-term of emergency housing, medium-term of transitional housing, or long-term accommodation.
A further 8600 low-income ACT households experienced rental stress in 2015-16, placing residents at risk of homelessness. Rental stress occurs when more than 30 per cent of gross household income is spent on rent
But the number of people being turned away from homelessness services has gradually fallen in the past five years.
In 2012-13, more than 1500 people who asked for help with accommodation went without.
However the number of clients accessing homelessness services in the ACT overall has fallen from from 5367 in 2012-13 to 4585 in 2016-17.
A spokesman for Housing Minister Yvette Berry said the Productivity Commission figures did not provide an accurate reflection of the effectiveness of the ACT's homelessness services.
"The ACT, like NSW and Victoria, has a central intake services model which manages access and entry to all homelessness services in the territory - for both accommodation and non-accommodation services. Under this model, the government directs services according to need which is not reflected in the national framework," the spokesman said.
"Our approach has been to assist people first seeking support, with the number of average daily unassisted requests (turn-aways) for accommodation and non-accommodation is very low in the ACT. This result has been stable over the last four reporting periods
"Contrary to the national trend, the number of clients with a need for accommodation in the ACT has been trending down over the past five years. The ACT was also the equal highest with NSW in the proportion of assistance to clients to sustain housing (27 per cent nationally). This focus on sustaining housing recognises the importance of early intervention in preventing homelessness."
The report also revealed ACT government spending on homelessness services had fallen by $5 million since 2012-13.
The ACT government spent $20.7 million on homelessness services last financial year.
That was up $300,000 on the previous financial year but down from the $25.3 million spent in 2012-13.
Under the National Affordable Housing Agreement, the federal government chipped in $23.9 million in 2016-17, down from $27.8 million in 2012-13.
Ms Berry's spokesman said the cut came when the federal government changed homelessness funding for states and territories to a per-capita rate when it introduced the National Affordable Housing Agreement in 2009.
"The reduction in Commonwealth funding was absorbed by the Community Services Directorate until 2013. Recognising this was not sustainable in the longer term, Housing ACT undertook extensive consultation with the ACT Specialist Homelessness Sector in 2012-13 to agree on a new costing model to give effect to the Commonwealth's NAHA funding reductions," he said.
"ACT government expenditure on specialist homelessness services has remained stable between 2015-16 and 2016-17."
The ACT had the highest proportion of clients accessing mental health services (7.1 per cent), family services (12.2 per cent), disability services (1.7 per cent) and legal and financial services (8.5 per cent).
But aside from Tasmania, the ACT had the lowest proportion of clients accessing domestic violence services in Australia, at only 16.3 per cent.
Ms Berry's spokesman said the data did not capture services provided to clients by services outside the homelessness sector, including the Domestic Violence Crisis Service.
An earlier version of this article incorrectly said only NSW fared worse than the ACT.