(1) Background: Globally, numerous development projects are being undertaken to expand and improve urban infrastructure facilities, which result in around 30% to 40% of construction and demolition (C&D) waste in the total waste generation. Due to its detrimental impacts on the environment and human health, several researchers have been striving to find effective methods to manage these large amounts of C&D wastes to minimise environmental impacts and maximise the economic and social benefits. Despite these efforts, limited studies have focused on comprehensively reviewing the integrated sustainable management of C&D waste. Thus, this study aims to conduct a comprehensive review of the published literature to identify barriers that hinder sustainable C&D waste management practices and map future research areas for effective C&D waste management. (2) Methods: A two-step systematic approach was adopted where the first step involved a bibliometric assessment of the published literature from 2002 to 2022, and then the most significant publications were reviewed from the bibliometric findings to achieve this study aim. (3) Results: The review findings identifies several research gaps which were categorised according to seven themes, including limitations in operational aspects, the lack of monitoring of legislation and regulations, an inadequate market for recycled products, inefficient stakeholder engagement and management, limitations of effective framework/models for sustainable C&D waste management, limited research on social performance, and inadequate integration of information technology in C&D waste management. This study’s findings are invaluable for researchers, industry professionals, and policymakers for in-depth understanding of the boundaries and potential future research areas to enhance sustainable C&D waste management practices.

The Australian construction industry generated approximately 29.2 million metric tonnes (Mt) of construction and demolition waste (C&DW) in 2022–2023, of which about 23.7 Mt (81.2%) was recovered, primarily through recycling (80.6%). Recovery concentrated on concrete, bricks, and rubble from large constructions, while C&DW from smaller projects was often directed to landfills. Most recovered materials are downcycled, have low market demand and contribute to unstable markets and continued reliance on virgin materials. To investigate these gaps, nine semi-structured expert interviews, two case studies, and a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis were conducted. The findings were organised into four clusters: (1) regulatory and governance, (2) operational and technological, (3) procurement, cost and market, and (4) stakeholder management barriers significantly impact C&D waste management practices. The study recommends four drivers and six enablers to enhance circular economy 3R (reduce, reuse, recycle) practices, including standardisation and harmonisation of reused and recycled products’ quality and cost, mandating circular procurement, increasing incentives and penalties, on-site sorting, awareness and capacity building, and digital technology application for data management. This integrated approach can guide policymakers and practitioners in strengthening C&DW reduction practices and developing an economically viable market for reused and recycled products.