Local and state law mandates off-street parking for newly-built apartments and townhouses in most Australian capital cities – and it comes at an eye-watering cost.
The report, aptly titled “Wasted Space”, claims developers could afford to build around 9000 extra homes over five years with this saving.
Meeting the current standards is forcing homebuyers to pay tens of thousands more in an already severe housing crisis.
It can blow out the construction budget for a new two-bedroom apartment by an average of $70,000 in Sydney, by $137,000 in Perth, $113,000 in Brisbane, $62,000 in Melbourne and $95,000 in Adelaide, according to the report.
For three-bedroom units, this cost exceeds $100,000 in most capital cities.
Grattan researchers found that a large chunk of people living in apartments don’t need parking.
Around 40 per cent of those living in studio or one-bedroom apartments don’t own a car, while 19 per cent of households in two-bedroom apartments don’t have a vehicle.
In Sydney and Melbourne, there are more car spaces in apartment buildings than cars.
As much as 40 per cent of these spaces sit vacant each night, the report found.
The experts at Grattan say reducing or scrapping the legal requirements would lower the price of new homes and drive down rent.
They suggested that developers “unbundle” car spaces so that renters or buyers can opt out of using them.
The report also recommended that state and local governments better manage on-street parking, including more permit schemes, time limits and user charging in high-demand areas.
Some councils have already abolished minimum car-parking requirements.
Brisbane City Council relaxed the rules for inner-city developments in March 2025 and several Sydney councils, such as the City of Sydney, City of Parramatta and the Inner West, have introduced maximum parking requirements.
And last year, the Victorian government axed minimum requirements for areas that are a short walk from public transport.
If every council and state government does the same, the report notes, Australian cities will have “livelier streets, more productive economies, and a higher quality of life”.
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