An economist has slammed the Albanese government's migration forecasts, warning a fresh surge in arrivals revealed in the federal budget will worsen Australia's housing crisis and increase pressure on renters.

New budget figures released on Tuesday project nearly 765,000 permanent migrants will come to Australia over the next three years, a trend economist Leith van Onselen says will deepen the nation's housing shortage.

The budget shows net overseas migration will reach 295,000 in the current financial year, followed by 245,000 in 2026-27 and 225,000 in 2027-28.

Van Onselen said the increased migration forecasts, quietly revised in the budget papers, had drawn little attention despite having major implications.

'What hasn't been reported and what won't be reported is that the government has actually upgraded net overseas migration,' he said.

He said the government had once again revised its estimates upwards, continuing a long trend of underestimating migration levels.

'The federal budget over many years has been incredibly poor at forecasting net overseas migration,' he said.

'Pretty much ever since this government came to office, they have underestimated what net overseas migration would be, and every time it seems to get upgraded.'

The new figures come after a record 518,000 migrants arrived in 2022-23 in the wake of the pandemic.

Since Labor came to power, net migration is now on track to top two million people before the next election in 2028.

Van Onselen warned that, even as the government tries to rein in numbers from these highs, the forward estimates still signal a strong migration program that will make it even harder to find housing.

'The reason why this is important is because we're obviously suffering from an acute rental crisis,' he said.

'We have rental vacancy rates at historical lows, and we have rents having experienced their largest rise over the last several years in living history.'

He also pointed out that the migration program does not include temporary arrivals such as international students, whose numbers have surged and added further strain to the rental market.

Van Onselen argued the ongoing influx of migrants is colliding with a housing sector that cannot keep up.

'Unfortunately, the federal government with these high net overseas migration forecasts is just going to put more pressure on the rental market,' Van Onselen said.

'That's just going to put more pressure at a time when we have soaring construction costs, labour shortages and can't build enough homes.'

He said renters are bearing the brunt of the growing gap between population growth and housing supply.

'Renters in Australia are the forgotten people. They're basically the ones who are getting absolutely smashed,' he said.

He pointed to data showing advertised rents have jumped roughly 48 per cent since late 2019, adding about $11,700 a year to the typical cost of renting.

Van Onselen also warned that higher migration would make it harder for younger Australians hoping to buy a home.

'This high immigration is a double whammy for first home buyers,' he said. 'It drives up their rents, makes it harder for them to save a deposit, and then also pushes up house prices, which makes homeownership even more difficult.'

With migration expected to remain high and the supply of new homes lagging behind, Van Onselen said pressures on renters and would-be buyers were unlikely to ease any time soon.