According to new research, removing a planning rule wouldn’t just lower apartment prices - it could also unlock thousands more homes.
A new report from the Grattan Institute has found that scrapping minimum car‑parking requirements for new housing developments could shave tens of thousands off the price of a new apartment, particularly for buyers of larger homes.
The report, titled “Wasted space: Axe car‑parking rules to ease the housing crisis”, found the biggest savings would come from removing rules that force buyers to pay for one or more car spaces they may not want or need.
Opting out of two mandated car parks could save large‑apartment buyers about $101,000 in Melbourne and $104,000 in Sydney. Picture: Getty
According to the report, buyers of larger apartments could save around $101,000 in Melbourne and $104,000 in Sydney by opting out of two mandated car parks.
Even buyers who still want one car space in these larger apartments could see savings of $35,000 in Melbourne and $52,000 in Sydney.
For apartments that require just one parking space, the savings are still substantial, with buyers able to save $66,000 in Melbourne and $52,000 in Sydney.
“Reducing the number of wasteful car parks built as part of new housing developments would reduce the cost of buying a new home. Buyers who don’t want a car park are currently forced to pay for one, bundled into their purchase price,” the report said.
Across Australia, most states have minimum car‑parking requirements for new housing developments, with local councils also setting parking rules through their own planning schemes. These requirements typically vary depending on the type of dwelling, number of bedrooms, location and proximity to public transport.
While minimum parking rules are intended to prevent congestion on residential streets, the Grattan Institute argues that state and local governments should instead manage on‑street parking through permit schemes, time limits and user charging.
Some governments have already begun reform. In late 2025, the Victorian government removed minimum car‑parking requirements in areas within a short walk of train, tram or frequent bus routes, while relaxing requirements in other locations.
Removing minimum car‑parking rules could unlock infill projects and add 9000 homes nationwide. Picture: Getty
The report also found Australia is spending nearly $1 billion each year building car parks — a figure that does not reflect how many Australians actually live in apartments, according to Grattan Institute CEO Aruna Sathanapally.
“Many people who live in apartments don’t want or need car‑parking, but they are forced to pay for it anyway,” Dr Sathanapally said.
According to the report, around 40% of households in studio or one‑bedroom apartments, and 19% of households in two‑bedroom apartments, do not own a car.
Meanwhile, 58% of households in family‑sized apartments with three or more bedrooms have just one car, or none.
“The result is a wasteful mismatch across our major cities between what parking is mandated and what’s needed,” Dr Sathanapally said.
Green shoots for supply
The Grattan Institute estimates that removing minimum car‑parking requirements would boost home building in infill areas and free up capacity to deliver an additional 9000 homes nationwide over the next five years.
It also says more developments would become commercially viable, as land currently used for parking could instead be used for housing.
Grattan’s modelling suggests that removing resident parking requirements alone could make around 140,000 dwellings more commercially viable in Sydney and Melbourne.
“Where parking adds more to construction costs than buyers are willing to pay, it can be the decisive factor tipping an otherwise viable project into unprofitability,” the report said.
“On constrained inner‑city sites, where excavation is particularly difficult, costs can reach $250,000 per space — making parking requirements the decisive factor in whether a site gets developed at all.”
Interested in learning more about buying and building new? Check out our New Homes section.
English (US) · 