Police made their presence known throughout Sydney's CBD on Saturday as some 400 people marched through the streets with Australian flags.
The group called for lower migration while crooning along to songs such as I Am Australian, which contains the lyrics, "we are one, but we are many, and from all the lands on earth we come".
An Australian National University report released on Thursday found tourism and travel data had been misused by neo-Nazis and white supremacists to increase participation at similar nationwide anti-immigration rallies in August.
The Australian Bureau of Statistics' permanent and long-term movement data records trips in and out of the country and classifies them by their duration, the legal status of the person making the move and other measures.
But this was not a valid measure of migration, report co-authors Emeritus Professor Peter McDonald and ANU Migration Hub director Alan Gamlen said.
"(The) data set has been used consistently by anti-immigration activists and political outfits regularly, to give an inflated sense of the numbers and say that immigration to Australia is out of control," Professor Gamlen told AAP.
"But it captures all sorts of people who are not in any way, shape or form migrants."
The data was misused so often the bureau issued a warning in August, saying it did not measure migration and was mostly used to understand traveller movements.
Australians have instead been urged to use the bureau's net overseas migration figures, the number of migrants arriving in Australia minus the number who leave.
While this figure rose after a COVID-19 pandemic-fuelled low, it has been falling sharply since September 2023.
"Saying immigration is out of control when that is not the case is divisive and potentially damaging to social cohesion," Prof Gamlen said.
"People who are speaking in the public sphere about this owe it to the Australian people to give them the facts so they can make the decisions about the things that are important to them.
"They can't do that if they're given wrong, fearmongering information."
Saturday's rally, organised by anti-vaccine protester Monica Smith, featured a pre-recorded message from far-right British figure Stephen Christopher Yaxley-Lennon, also known as Tommy Robinson.
He has previously been banned from various social media platforms for violating rules on hateful conduct and hate speech.
In the past, the federal government has denied visas to international far-right figures including Gavin McInnes, who was due to tour Australia with Robinson in 2019.
Ahead of the rally, NSW Police Minister Yasmin Catley warned anyone engaging in unlawful activity would be arrested.
"NSW is a strong, multicultural society - we will not tolerate hate on our streets," she said.
A counter-protest rallied a few blocks away at Hyde Park, welcoming refugees and migrants and calling for Australians to "smash" racism.
Gadigal, Bidgigal and Yuin Elder Rhonda Dixon Grovenor urged Australians to treat one another with love and respect, while University of Sydney academic Nick Riemer condemned the anti-immigration march.
"It is ludicrous," he said.
"It comes from the intellectual equivalent of the back of a cereal packet and it is bereft of any real basis or credibility."
Police in Victoria are setting up designated areas in Melbourne and increasing their operations ahead of an anti-immigration protest on Sunday.
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