Sydney rolls out ‘dramatic' parking changes to combat CBD decline

News.com.au

2 days ago

Councils have been slashing parking rates in an attempt to combat further CBD decline after previously slugging commuters with costly parking fees across Sydney for many years.
Recent data has revealed Sydney's parking operators are introducing day-specific early bird rates that acknowledge the permanent shift in commuting patterns, with parking fees in major jobs hubs outside the Sydney CBD beginning to moderate.
It's come amid still elevated office vacancies and office property market that has yet to return to its pre-Covid heights.
Ray White reported the emergence of cheaper Monday and Friday parking mirrors Auckland's approach, where operators recognised these as preferred work-from-home days and adjusted pricing accordingly.
Ray White Commercial head of research Vanessa Rader said this granular pricing strategy represents a fundamental evolution from traditional volume-based early bird discounts to dynamic demand management tools.
'The variation across Sydney's office submarkets reveals telling disparities in competitive pressure,' she said.
'While Sydney CBD maintains its position with daily rates averaging $77.00 and early bird discounts of 43.5 per cent, the struggling fringe markets tell a different story.
'Parramatta's dramatic intervention through council-controlled facilities at Justice Precinct and Parramatta Station, where flat-rate fees have been significantly reduced to just $14.00, represents public sector acknowledgment of CBD recovery challenges.
'Even more creatively, operators are introducing flexible monthly parking arrangements that equate to as low as $9.25 per day, encouraging hybrid workers to come and go as they please.'
Ms Rader said this compares starkly with North Sydney's $54.24 daily rates and Chatswood's $31.84, yet these markets offer substantially deeper early bird discounts at 50.9 per cent and 59.2 per cent respectively, with Chatswood also embracing flexible early bird options.
'Parramatta's office fundamentals support this parking intervention strategy,' she said.
'With an elevated 20 per cent vacancy rate and negative absorption over the past year, the precinct desperately needs footfall.'
According to Ms Rader, the council's parking rate reduction functions as an economic development tool, attempting to stop further CBD decline.
North Sydney's 23.7 per cent vacancy rate and Chatswood's 17.7 per cent rate reportedly also suggest these markets may soon adopt similar pricing strategies.
Ms Rader said the Metro rail network additionally adds another layer of complexity to these parking dynamics.
'North Sydney and Chatswood benefit from high-frequency Metro services that provide seamless connectivity, potentially reducing parking demand as commuters opt for public transport,' she said.
'This transport advantage may explain why these markets can maintain relatively aggressive early bird discounting without complete pricing collapse.
'Parramatta's upcoming Metro connection could fundamentally alter its parking landscape, potentially reducing reliance on council-subsidised rates as improved transport connectivity stimulates natural demand recovery.'
The report revealed the two-tier early bird pricing evolution, combined with targeted council intervention and transport infrastructure development, demonstrates how parking strategy has become central to CBD recovery efforts.
'As we observed across Australian and New Zealand markets, parking performance serves as both a leading indicator of office market health and a policy lever for urban economic management,' Ms Rader said.
'The sophistication of these pricing responses suggests operators and councils recognise that traditional commuting patterns have permanently shifted, requiring fundamental recalibration of revenue expectations and urban planning strategies.'