Sydney is most in need, with projections showing more than 210,000 additional homes are required. Melbourne comes in second place, needing 176,800 more places.

Of the necessary dwellings, 728,600 should be for social housing, with the remainder to be tailored as affordable homes, the University of NSW's City Futures Research Centre found.

Lead researcher Laurence Troy said on Thursday if the forecast need is to be met by 2036, at least 12 per cent of all residential development should be low- to middle-income housing.

"To cover the backlog of unmet need and future need in Australia, two in 10 new homes will need to be for social housing over the next 20 years, and a further one in 10 for below market affordable rental housing," Mr Troy said.

Everybody's Home campaign spokesperson Kate Colvin said the report highlighted the nation's housing crisis.

"It shows the housing system is far more broken than we first thought - but it also shows that delivering the scale of new homes for people who need them is entirely doable with political will and commitment," Ms Colvin said.

The report presents findings of a research project commissioned by Community Housing Industry Association NSW and Homelessness NSW.

EXTRA SOCIAL AND AFFORDABLE HOUSING NEEDS BY 2036

* Sydney 217,000

* Melbourne 176,800

* Brisbane 117,600

* Perth 95,700

* Adelaide 50,500

* Hobart 8,500

* Darwin 4,800

* ACT 11,700

SOURCE: City Futures Research Centre

Australian Associated Press