Australia's biggest migration boom is exacerbating the rental crisis, while house prices are overvalued by between 5 per cent and 15 per cent, the International Monetary Fund has said.

Immigration added a record 199,064 people to Australia over the year to March - the biggest annual rise in history, figures released yesterday by the Bureau of Statistics show. This surpasses the boom after World War II, which peaked at about 149,000 people in 1950.

"The inflow of migration is putting pressure on the housing rental market," the IMF said in its latest report card on the Australian economy.

The proposition is supported by new evidence showing rental vacancy rates are lowest in suburban areas where most new migrants tend to settle, such as the western suburbs of Sydney.

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