A surge in international students and temporary workers is behind more than half a million migrants entering Australia within 12 months.
Net overseas migration totalled 548,800 in the year to September 30, according to Australian Bureau of Statistics data published on Thursday.
The nation's population grew by 2.5 per cent to 26.8 million, an annual increase of 659,800 people.
Western Australia had the fastest growing population, up 3.3 per cent compared with the previous year.
Victoria was in second place with growth of 2.9 per cent, while Tasmania had the least growth, at 0.3 per cent.
Australia added 172,700 people in the July to September quarter last year, while net overseas migration was 145,200.
The government said its push to bring down net migration was unlikely to be shown in the latest data.
Prime Minister Anthony Albanese said the migration and population figures were lower than what was anticipated.
Following a review, the government has reduced the number of student visa approvals in a bid to stop the rorting of the international education system.
Government forecasts show net overseas migration will be halved by next year.
Opposition immigration spokesman Dan Tehan said the government could target the skills needed to make sure migrants were filling work shortages.
"What this government is doing is just issuing record numbers of visas, it has no plan," he said.
Mr Tehan blamed migrants for the nation's worsening housing crisis and said the government had created a mess by not keeping migration levels in sync.
Democracy in Colour, a progressive political group, condemned comments made by the opposition for scapegoating migrants rather than proposing practical solutions to the housing crisis.
A migrant and student study by learning company Pearson found immigrants were driving economic growth and were crucial to filling shortages in the country's most critical sectors.
The next round of the government's migration commitments will come into force at the weekend.
These include increasing English language requirements for student and graduate visas and the introduction of a new "genuine student" test.
This test is expected to crack down on international students coming to Australia primarily to work rather than study.
The government will also have enhanced powers to suspend high risk education providers from recruiting international students.
Known as "ghost colleges" and "visa factories", the providers will be issued with warning notices and given six months to improve.
Skills and Training Minister Brendan O'Connor said there was no place for dodgy providers in the education sector because they undermined the majority who did the right thing.
"Increased powers for the regulator and tougher penalties will deter dodgy providers who currently see fines as a risk worth taking or merely a 'cost of doing business'," he said.
