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By-election loss the price for leadership change - Aus PM

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Australian Prime Minister Scott Morrison has told the Liberal Party it must own the disastrous Wentworth by-election result, saying it paid "a big price" for its latest leadership coup.

Mr Sharma was attempting to retain the seat held comfortably by former prime minister and popular local member Malcolm Turnbull, who was dumped as leader of the party in August before resigning from Parliament, triggering the poll.

It is the first time since Federation that the blue-ribbon electorate has changed hands from the Liberal Party or its predecessors.

Mr Morrison conceded the loss was not unexpected.

"The Liberal Party has paid a big price tonight for the events of several months ago," he told the party faithful.

"But as a party we will continue to rise again."

Mr Morrison admitted Liberals were angry and had expressed their frustration at the ballot box.

"I want to make something really clear. The result today is on us, the Liberals, not on Dave Sharma," he said.

The defeat will intensify soul-searching within the Liberal Party, with member for Reid, Craig Laundy, predicting those who played key roles in the leadership spill would begin to blame Mr Turnbull.

"There's an internal struggle within the party about where we go moving forward," he told Sky News.

"There's been a cry for us to move more to the right. I don't think that has played well in Wentworth obviously."

ABC elections analyst Antony Green called the election just over an hour after polling booths closed after the magnitude of the swing became clear early.

Mr Turnbull's son Alex alluded to Liberals' internal struggle when he urged voters to use the by-election as "an intervention".

Alex Turnbull, who had been a thorn in the side of the Liberal campaign with his increasingly-outspoken social media posts, claimed the party had been taken over by hard right "extremists".

Liberal MP Trent Zimmerman called the result "devastating".

"Our job is to learn a message that voters in Wentworth have sent us because this is not a uniquely Wentworth message."

The loss robs Mr Morrison of his majority in Canberra, and while it won't bring down the Federal Government it will potentially make it difficult to pass legislation.

"We will work constructively with all of those that sit on the crossbench, as we always have," he said.

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