The cost of meeting carparking requirements on new apartments and townhouses is blowing out the cost of building in SA, a new report shows.
The report by policy advocacy group the Grattan Institute has estimated the nation is building more than $1bn in unwanted and unused carparking alongside new homes every year.
While they argue ditching minimum parking requirements for developments in major capitals would cut thousands from the cost of building a new home, the report notes it could also provide more space to build homes in, as it could cut more than 86,000 unnecessary carparks from new developments in the next five years.
According to the report – which looks at changes to carparking rules across the states and territories as being one of the potential ways to help ease the nation’s housing crisis – SA residents are paying the most to add suitable carparking to their properties for every house type bar three.
The cost of including a parking space with a single-bedroom apartment or unit adds $95,000 to the build cost, the report shows, while adding a garage to a townhouse adds $53,000.
The next closest was Perth apartments at $84,000 – a difference of $11,000.
Including parking provisions for a two-bedroom apartment also adds $95,000, while the cost for the same inclusion to a townhouse increases by $52,000 to $105,000.
Carparking adds significantly to build costs at a time when car use is declining, a new report shows.
That’s the most expensive in the nation for two-bedroom townhouses, while garaging costs of Perth and Brisbane two-bedroom apartments sit at $137,000 and $113,000 respectively.
Including sufficient garaging to both a three and four-bedroom townhouse adds $105,000 to the budget – the nation’s highest – while carparking costs for an apartment add $190,000 to a build total.
The next closest for townhouses across both of these townhouse sizes are $102,000 for Sydney townhouses, while garaging for Perth apartments adds $165,000 to the budget.
The Grattan Institute research noted that 2021 Census data found 40 per cent of studio and one-bedroom apartment households did not own a car, nor did 19 per cent of those living in two-bedroom units.
In 58 per cent of the nation’s three or more-bedroom apartments, the residents reported owning one or fewer cars.
CEO of Grattan Institute Aruna Sathanapally. Picture: NewsWire / Martin Ollman
Grattan Institute chief executive Aruna Sathanapally said the status quo was leading to a “wasteful mismatch” between the carparking that was needed and what was mandated.
“Many people who live in apartments don’t want or need carparking, but they are forced to pay for it anyway,” Ms Sathanapally said.
“Letting Australian homebuyers choose the carparking they need will make housing cheaper, get more homes built faster, and create more walkable, cleaner, and better-designed cities.”
Report co-author Ashleigh Chang said cutting back carparks for apartment approvals could reduce prices in multiple ways, first by not having to pay for the feature.
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Longer term, the move could also help make more developments viable sooner — allowing builders to create more housing and limiting the growth in home values caused by shortfalls in their supply versus demand from a rising population.
“This is one of the small wins you can get when you are so desperately in need of homes right now,” Ms Chang said.
The report also suggests disconnecting off-street carparks from apartments on titles could also make it easier to sell them to those who will actively use them.
Its most controversial call is to better manage on-street carparking through permits, time limits and charging for it — which would also help boost local council coffers.
Ms Chang said these ideas were more intended for areas with significant demand and where congestion could be an issue for on-street parking, and not necessarily for outer suburban areas where car use was more ubiquitous.
Buyer’s agent Melinda Jennison. Supplied
Real Estate Buyers Agents Association of Australia president Melinda Jennison said the historic view that you need a car was evolving as the nation’s population changed.
“But there would probably still be a premium placed on those units with a carpark, and you would expect a discount on those that come without one,” Ms Jennison said.
“And we have got to look at ways to make high-density development more feasible.”
Urban Development Institute of Australia national president Oscar Stanley said while it would be necessary to “tread carefully” in some parts of the new home market when cutting carparks, it was worth considering that in 10-20 years time people’s use of cars could change.
“Will we all have one car? Two cars? Or will we subscribe to a car service?” Mr Stanley said.
“So where apartments are being built near public transport, it’s good policy. And we should be looking at every possible scenario to drive costs down as that’s the problem holding back every apartment build market in the country at the moment.”
– with Nathan Mawby
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