Housing affordability continues to dominate property discussions across the country, and one proposal gaining increasing attention is the reduction of mandatory car parking requirements in new apartment developments. Supporters argue the change could significantly reduce construction costs and improve apartment affordability, particularly in inner-city and transport-connected locations where car ownership rates are already declining.
New analysis from the Grattan Institute suggests more than $1 billion is effectively being wasted on off-street car parks that are rarely or never used. The report argues that existing planning rules are forcing developers to include parking spaces in many projects regardless of whether future residents actually need them.
This issue is becoming increasingly relevant as apartment living patterns continue evolving
According to the research, around 40% of households living in studio or one-bedroom apartments do not own a vehicle. Even among two-bedroom apartment households, approximately 19% reportedly live without a car.
Despite this, many local planning rules still require developers to provide significant amounts of off-street parking within new apartment projects.
That requirement carries major cost implications.
The analysis found off-street car parking accounts for approximately 13% of the total built floor space within apartment developments. In practical terms, a substantial portion of many buildings is being dedicated to infrastructure that may not align with modern living patterns or actual buyer behaviour.
The cost impact is significant across all major capital cities.
According to the Grattan Institute analysis, parking requirements add approximately:
* $70,000 to a typical two-bedroom apartment in Sydney
* $62,000 in Melbourne
* $113,000 in Brisbane
* $137,000 in Perth
* $95,000 in Adelaide
Those figures highlight how planning requirements can directly influence housing affordability.
For many buyers, particularly first-home buyers and downsizers, these additional costs can become a major barrier to entering the property market.
The issue is particularly relevant in suburbs where public transport, walkability, and lifestyle infrastructure reduce the practical need for vehicle ownership. Inner-city locations with strong access to train stations, bus networks, retail precincts, and employment hubs often attract residents who prioritise convenience and connectivity over car dependence.
In these areas, mandatory parking requirements may no longer reflect how many residents actually live.
Grattan Institute chief executive Aruna Sathanapally argues many apartment residents are effectively paying for parking they neither need nor use.
According to the report, these added development costs can act as a “handbrake” on new housing supply because they increase construction expenses, reduce development efficiency, and limit affordability outcomes for future residents.
The proposal to reduce or remove parking minimums has generated strong debate within planning, development, and property sectors.
Supporters argue the changes could:
* Improve housing affordability
* Increase apartment supply
* Encourage more efficient land use
* Reduce construction costs
* Support public transport usage
* Improve urban density outcomes
Critics, however, argue reducing parking availability may create unintended consequences in suburbs where public transport remains inadequate or where street parking is already heavily constrained.
This is particularly important in outer suburban locations where residents still rely heavily on private vehicle access for commuting, employment, schooling, and daily services.
The reality is that parking needs can vary dramatically between suburbs.
An inner-city apartment located beside a major train station may attract very different buyer demographics compared to a suburban development located far from transport infrastructure. Applying the same planning rules uniformly across every location may not reflect changing lifestyle patterns or practical transport needs.
The discussion also reflects broader shifts occurring across Australian cities.
Population growth, urban densification, and infrastructure investment are reshaping how people live and move around metropolitan areas. Younger buyers in particular are increasingly prioritising walkability, proximity to amenities, and public transport access over traditional car-focused suburban living.
At the same time, construction costs remain elevated.
Labour shortages, higher material costs, financing pressures, and planning delays continue affecting apartment feasibility across many markets. Developers facing rising construction expenses often need to pass those costs onto buyers through higher apartment prices.
Reducing unnecessary parking requirements could become one mechanism for improving project feasibility and increasing housing supply.
However, any policy changes would likely need to be implemented carefully and strategically.
Transport infrastructure, public transit quality, and local demographic trends all play major roles in determining whether reduced parking requirements are practical within specific suburbs.
For buyers and investors, these planning discussions are important because they can influence:
* Future apartment affordability
* Development feasibility
* Population density
* Buyer demand
* Rental market dynamics
* Long-term urban growth patterns
Apartment markets are increasingly being shaped not only by interest rates and supply levels, but also by planning policy and infrastructure decisions.
The debate around parking minimums highlights how housing affordability is influenced by far more than simply property prices alone.
Construction policy, planning regulations, transport infrastructure, and urban design all contribute to the final cost buyers ultimately pay.
As cities continue evolving and living patterns shift further toward higher-density housing, the conversation around parking requirements is likely to remain a significant issue across the property sector.
