Queensland Premier Annastacia Palaszczuk has bristled at suggestions she doesn't 'get' how desperate tens of thousands of people are for social housing, saying "that is false".
The auditor-general has found the government isn't building enough social and affordable homes, keeping an accurate waiting list or managing existing stock properly.
Almost 12,000 households of almost 32,000 on the official registrar are likely to miss out on housing due to those failures, said the report released on Tuesday.
Ms Palaszczuk has defended her policies, saying she's signed off on billions in investment in new homes, funding for social housing organisations and rental support.
She blames the crisis in higher interstate migration to Queensland, supply shortages in the private housing market and inflation.
"So this is a very complex issue, but it's one that we of course are taking very seriously," the premier told reporters on Wednesday.
"You know, there's, added pressures at the moment. We're building houses as quickly as we can, but we also have to compete with the private market."
Ms Palaszczuk bristled when asked if she understood the "degree of desperation" some families were experiencing, including some who had been on the waiting list for two years in her electorate of Inala.
"I do understand it, yes I do though," she said.
"I represent social housing, I represent a social housing community, please do not say I do not understand this issue. That is incorrect and that is false."
Opposition Leader David Crisafulli said he's disappointed the government isn't acknowledging the scale of the problem or its own failures.
He was scathing of social posts by the premier on Tuesday, which spruiked the government's social housing policies without mentioning the auditor-general's report.
"To not acknowledge and listen and promise to do better is deeply troubling," he said on Wednesday.
"Imagine being that person sitting around the table, not knowing where you're going to be living next month, and to see a comment that things have never been glossier."
Auditor-General Brendan Worrall's report said government plans to build 6365 social and affordable homes by 2025 "will not be sufficient" to meet demand.
The housing department's failure to keep an accurate, detailed, centrally-monitored and updated housing register is compounding the problem, the report said.
About 15 per cent of the state's 74,133 dwellings are under-occupied, he wrote, meaning they have one or more vacant bedrooms.
The auditor-general recommended the government regularly review and update the housing register and model future demand, prioritise applicants based on needs and manage housing stock to ensure bedrooms aren't left vacant.
Ms Palaszczuk said the housing department is working on implementing all the recommendations.
