ABC election analyst Antony Green says independent candidate Kerryn Phelps is still on track to win the Wentworth by-election from the Liberals, despite a narrowing of her margin on Sunday as vote counting continued.

Key points: The ABC election count put Dr Phelps ahead by more than 1,600 votes after preferences at 7:00pm AEDT

The ABC election count put Dr Phelps ahead by more than 1,600 votes after preferences at 7:00pm AEDT Antony Green still favours Dr Phelps to win

Antony Green still favours Dr Phelps to win Earlier, Dr Phelps pushed back against Labor's call for an early general election

Dr Phelps claimed victory on Saturday night as Liberal candidate Dave Sharma suffered a swing of about 19 per cent against him.

She saw her margin narrow to fewer than 900 votes on Sunday, as postal ballots were counted and after four large pre-poll voting centres with 18,000 votes were released close to midnight.

But that margin then increased as recounts were held in the booths of Bondi Beach, Bellevue Hill and Vaucluse.

"Kerryn Phelps is ahead and she's probably just far enough ahead to survive the trend of the further postal votes," Green said.

At around 7:00pm AEDT, the ABC's election count showed that Dr Phelps had a lead of more than 1,600 votes after preferences.

But Green cautioned that the official final result may not be known for days.

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Prime Minister Scott Morrison and Treasurer Josh Frydenberg have both said "angry" Wentworth voters "punished" the Liberal Party for tearing down Malcolm Turnbull, who held the seat until he was removed as PM.

But on Sunday morning Mr Morrison said that while it was clear there was a significant swing against the Government, it was getting "tighter by the minute".

"We will simply wait for that normal democratic, robust and credible process to follow its course," Mr Morrison said.

"It is down to just over 800 votes and if it gets as close as 100 then an automatic recount is triggered under the normal rules — I am not saying it will get to that."

Sorry, this video has expired Prime Minister Scott Morrison says there are still votes to count from the Wentworth by-election.

Labor agitates for early poll

Earlier Dr Phelps pushed back against Labor's call for an early general election, saying the Coalition should serve a full term unless there were "exceptional circumstances".

Labor's Manager of Opposition Business Tony Burke said the Coalition told voters that an independent victory in Wentworth would bring more uncertainty to Canberra.

"Now, if that's [Mr Morrison's] position, that means he has actually spent this whole campaign arguing that if we got the result we got last night, it would cause instability in people's lives and in the economy," Mr Burke told Insiders.

"I don't see how he can argue that and then not say we have to have an election."

Losing a majority in the House of Representatives does not necessarily spell the end for the Government, but the Opposition will test Mr Morrison's control of the House.

If Dr Phelps does claim the seat, then the Opposition would still need an absolute majority of 76 votes to throw out the Government's agenda in the House — which means one Government MP would still need to cross the floor.

Sorry, this video has expired Liberal candidate Dave Sharma concedes defeat

Dr Phelps did not give a commitment to voting with the Government on motions of no confidence, stating that she would need to consider each vote on its merits.

"All governments should go full term unless there are exceptional circumstances, and the next election is due in May next year and that's time enough," Dr Phelps said.

"We saw last week a kind of recklessness with people voting on motions they hadn't read and didn't understand and that's not how I operate.

"I need to have evidence, I need to see a full brief, I need to know what I am voting on, and talking about voting one way or another on a hypothetical motion in the future would be careless."

'We need to cop it on the chin'

Treasurer and Deputy Liberal Leader Josh Frydenberg said the by-election result was "deeply disappointing" and the Liberal Party needed to "cop it on the chin".

Mr Frydenberg said the party was "absolutely" punished for tearing down Malcolm Turnbull's prime ministership, and that the party was already seeking assurances of support from crossbench MPs.

"We are not going to be in a situation of chaos, we are going to be in a new world without a clear majority on the floor of the house," Mr Frydenberg told Sky.

"That being said, history shows that governments without a clear majority can run for a number of years."

The Treasurer said he did not believe the Wentworth by-election result would have any sway on the timing of the general election, which must be held before May next year.

"Bill Shorten can take no comfort out of last night's result — he couldn't even show his face in Wentworth, which shows his perspective in Canberra," he told Sky.